Should a property investor use a limited company for their portfolio?

It depends on your tax position and plans. Companies get full relief for mortgage interest against rental profit, where individuals only get a 20% tax credit, but incorporating an existing portfolio triggers capital gains tax and SDLT unless a specific relief applies.

Since the finance cost restriction, individual landlords cannot deduct mortgage interest from rental income; they get a basic rate tax credit instead, which pushes highly geared higher-rate landlords towards a company, where loan interest remains a full deduction against rental profit taxed at 19-25%. Extracting that profit as dividends adds a second layer of tax, so the comparison depends on whether you need the income personally or plan to reinvest it.

Buying new property through a company from the outset avoids the incorporation problem entirely. Moving an existing personally-held portfolio into a company is usually a disposal for capital gains tax at market value and a purchase for SDLT at market value, both payable even though no cash changes hands, unless the portfolio qualifies as a genuine property rental business eligible for incorporation relief, which HMRC applies narrowly.

Companies buying residential property pay the same additional dwelling surcharge as individuals buying additional homes, and a flat 17% SDLT rate applies to a single dwelling bought by a company for over £500,000 unless a relief for property rental businesses applies. This makes company purchases of higher-value single dwellings expensive unless structured correctly from the start.

The Annual Tax on Enveloped Dwellings applies to companies holding UK residential property worth over £500,000, with an annual charge and return due even where reliefs reduce the charge to nil for a qualifying rental business. Missing the ATED return deadline brings penalties regardless of whether tax is actually due.

Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.