Should you incorporate your buy-to-let portfolio?
Transferring rental property into a limited company can save significant tax — but it triggers Capital Gains Tax and Stamp Duty on the same day.
When incorporation makes sense
You're a higher-rate taxpayer
Section 24 hits hardest at 40% and 45%. If your rental profit (after expenses but before mortgage interest) pushes you into higher-rate territory, incorporation can reduce your effective tax rate significantly.
You have significant mortgage interest
The more mortgage interest you pay, the bigger the Section 24 impact. If mortgage interest represents 40%+ of your rental income, incorporation may be worth the upfront cost.
You're holding long-term
Incorporation has high upfront costs (CGT + SDLT). If you plan to hold the properties for 10+ years, you have time to recover those costs through annual tax savings. Short-term holds rarely justify incorporation.
You're building a portfolio
If you're acquiring new properties, buying them in a limited company from the start avoids the CGT/SDLT hit on transfer. Existing properties can stay personal, new ones go into the company.
When it doesn't make sense
Low mortgage levels
If you own properties outright or have small mortgages, Section 24 doesn't hurt much. The upfront cost of incorporation (CGT + SDLT) may never be recovered.
Planning to sell soon
If you're selling within 5 years, the upfront incorporation costs likely exceed any tax savings. Better to stay personal and pay the Section 24 tax.
You're a basic-rate taxpayer
Section 24 has minimal impact at 20%. Corporation tax (19%) + dividend tax may not save you much, and the upfront costs are the same regardless of tax bracket.
You need to extract all profit
If you rely on rental income to live, extracting profit as dividends triggers personal tax. The company structure only saves tax if you can leave profit in the company.
Calculate your incorporation costs
Get a quick estimate of upfront costs (CGT + SDLT) and break-even timeline.
Incorporation Cost Calculator
Calculate the upfront cost (CGT + SDLT) and break-even timeline for incorporating your rental property.
Simplified estimate. Actual costs depend on your specific circumstances and require full feasibility analysis.
Our incorporation process
Initial feasibility call
We discuss your portfolio, income, tax position, and plans. This is a short conversation to understand whether incorporation is even worth modeling.
Full financial modeling
We calculate upfront costs (CGT + SDLT), annual tax savings, break-even timeline, and cash flow impact. You get a written report with clear recommendations.
Decision and implementation
If you decide to proceed, we coordinate with your solicitor, set up the company, handle the property transfer, and ensure all filings are correct. If you decide not to proceed, that's fine — you have the analysis for future reference.
What you get
- ✓Full CGT and SDLT cost calculation based on your actual property values and purchase prices
- ✓Annual tax saving comparison: personal vs. company structure
- ✓Break-even timeline showing when you recover the upfront costs
- ✓Clear recommendation: incorporate now, wait, or don't incorporate at all
- ✓Written report you can share with your solicitor or mortgage broker
Get your incorporation feasibility analysis
Book a free consultation. We'll discuss your portfolio and give you a clear recommendation.