"Put it all in a company" sounds simple. In practice, moving existing properties into a company is one of the most expensive and technical decisions a landlord can make.
Why it can cost so much
- Capital gains tax: the transfer is usually treated as a sale at market value, so tax can be due on years of growth, at 18% or 24%.
- Stamp duty: the company usually pays stamp duty at the higher rates on the market value, even though you own it.
- Refinancing: personal buy-to-let mortgages usually have to be repaid and replaced, possibly with early repayment charges.
- Fees: legal, accountancy and lender costs.
Reliefs, and their conditions
Some reliefs can reduce or defer these costs, but they depend on how your portfolio is owned and run. The conditions are strict, and HMRC scrutinises arrangements that look designed to avoid tax. Landlords sold unsuitable schemes have faced large bills later.
Before you move anything, get a rough idea of the cost with our calculator and speak to a specialist.
Frequently asked questions
What is incorporation relief?
A relief that can defer capital gains tax when a business is transferred to a company in exchange for shares. For landlords, HMRC has to accept that the letting activity is a business, which depends on the facts.
Is there stamp duty relief for incorporating a partnership?
In some cases, where property is held by a genuine partnership, there may be stamp duty relief on transfer to a company. The rules are complex and HMRC looks closely at arrangements set up mainly to save tax.
Should I use a scheme to move properties into a company?
Be very cautious of schemes promising to avoid tax on incorporation. Some have been challenged by HMRC. Always get independent specialist advice.
Request a call back
Tell us a little about your situation and we'll call you, usually within one working day, to understand what you need. If it would help, we'll then put you in touch with a landlord tax specialist. We'll always tell you who they are before passing on your details. We don't give advice ourselves, and there's no obligation.