Incorporation & Business Structure

Since the mortgage interest restriction under Section 24 took full effect in April 2020, incorporation has become the most asked-about topic in property tax. The logic seems simple: companies pay corporation tax at 19–25% instead of income tax at 40–45%, and they can still deduct mortgage interest in full. For many landlords, that’s a significant saving.

But the decision isn’t as straightforward as it looks. Transferring existing properties into a company triggers SDLT on the market value and potentially CGT on the gain. Your mortgage lender may not agree to the transfer. Extracting profits through dividends creates another layer of tax. And the ongoing compliance costs are higher than for a sole proprietorship. Done wrong, incorporation can create a tax bill that wipes out years of savings. And once triggered, it’s not reversible.

None of that means incorporation is wrong. For higher-rate taxpayers buying new properties, it’s often the right move from day one. For landlords with existing portfolios, it can still make sense — but only if the long-term savings outweigh the upfront costs. The only way to know is to model it using your actual numbers, not generic examples from the internet.

That’s what we do. We’ll take your income, your portfolio, your mortgage arrangements, and your plans for the next five to ten years, and we’ll show you the numbers both ways. If a company structure saves you money, we’ll tell you how much and handle the setup. If it doesn’t, we’ll tell you that too. That’s how landlord tax advice should work — based on your numbers, not a generic article.