Moving a personally held rental portfolio into a limited company can cut the ongoing tax on profits, but the transfer itself is a disposal: it can trigger capital gains tax at 18% or 24% (2026/27) and stamp duty land tax including the 5 percentage point additional dwellings surcharge. Whether incorporation pays depends on whether incorporation relief applies, the size of the SDLT bill, and how long you will hold the portfolio afterwards. With property income tax rates rising to 22%, 42% and 47% from 6 April 2027, more landlords are asking the question this year. Correct as at 4 August 2026, for the 2026/27 tax year.
Why landlords are looking at this again
Inside a company, rental profits are taxed at corporation tax rates, 25% at the main rate and 19% on profits up to £50,000 (FY2026), and mortgage interest is fully deductible against profits. Personally, profits are taxed at up to 45% now and up to 47% from April 2027, with mortgage interest relieved only as a basic rate credit under Section 24 (20% for 2026/27, 22% from April 2027). Our guides to the April 2027 landlord tax rises and to company versus personal ownership for new purchases cover that background.
For a new purchase, choosing a company is cheap: you simply buy in the company's name. Incorporating an existing portfolio is the expensive version of the same decision, because of the two transfer taxes.
The two transfer costs
Capital gains tax first. Transferring properties to your own company is a disposal at market value, taxed at 18% or 24% on the accumulated gains. The exception is incorporation relief under section 162, which rolls the gains into the base cost of your shares. It requires the portfolio to be a genuine business transferred as a going concern, with the whole business and all its assets (other than cash) exchanged for shares, as set out in HMRC's Incorporation Relief helpsheet (HS276). A handful of passively let properties may not qualify as a business; an actively managed portfolio that takes real, regular work may. This boundary is exactly where professional judgement, and HMRC scrutiny, sit.
Stamp duty land tax second. When you transfer property to a company you are connected with, SDLT is normally charged on market value, per GOV.UK's guidance on transferring ownership of land or property, and the 5 percentage point surcharge for additional dwellings applies on top of the standard bands. There is no general SDLT incorporation relief for individuals; specific rules exist for genuine partnerships, and that is a fact specific area where marketed shortcuts have caused real trouble.
A warning on schemes. Arrangements promising incorporation with no CGT and no SDLT for ordinary landlord portfolios have been aggressively marketed in recent years and are under HMRC scrutiny. If a structure only works because several bold assumptions all hold at once, the risk sits with you, not the promoter. Compliant incorporation planning and scheme selling are different things.
Personally held versus company held
| Held personally | Held in a company | |
|---|---|---|
| Tax on rental profits | 20% / 40% / 45% (2026/27); 22% / 42% / 47% from April 2027 | Corporation tax: 19% to 25% (FY2026) |
| Mortgage interest | Basic rate credit only: 20% (2026/27), 22% from April 2027 | Fully deductible against profits |
| Taking the profits out | Already yours after income tax | Dividend tax on extraction: 10.75% / 35.75% / 39.35% (2026/27) |
| Getting existing properties in | n/a | Possible CGT at 18% / 24% unless incorporation relief applies; SDLT on market value plus 5% surcharge |
| Admin | Self assessment, MTD quarterly updates once mandated | Company accounts, corporation tax return, payroll or dividend paperwork |
Example
Example. A couple own eight let properties with substantial accumulated gains and large mortgages, and property is effectively their main occupation: they manage tenancies, maintenance and lettings themselves, full time. They are weighing incorporation before the April 2027 rate rises. The decision walk-through looks like this. First, does the portfolio amount to a business for incorporation relief? Their level of activity gives them a credible case; a passive two-flat landlord would struggle. Second, what would SDLT on market value plus the 5% surcharge cost across eight properties, and does the partnership question even arise on their facts? Third, how long will they hold? The ongoing corporation tax saving is annual, while the SDLT cost is once: the longer the hold, the better incorporation looks. Fourth, do they need the rental income to live on? If yes, dividend tax eats much of the corporate saving; if profits will be reinvested in more property, the company compounds at corporate rates. Only after those four answers does the incorporation decision become obvious in either direction.
What to do now
Start with an honest inventory: accumulated gains per property, outstanding mortgages, current market values, and how much genuine management activity the portfolio involves. That determines both transfer costs and the strength of any incorporation relief position. Then model staying personal at the 2027/28 rates against incorporating, over your realistic holding period. This is a calculation, not a slogan, and it is one where getting the business question wrong at the outset is expensive to unpick. Our landlord tax calculator helps with the personal side, and our tax planning page covers the wider review.
Frequently Asked Questions
By default yes: the transfer is a disposal at market value, taxed at 18% or 24% (2026/27). Incorporation relief under section 162 can roll the gains into your shares, but only where the portfolio is a genuine business transferred as a going concern wholly or mainly in exchange for shares.
Normally yes, on the market value of the properties, with the 5 percentage point additional dwellings surcharge on top of the standard bands. Special rules apply to genuine partnerships, which is a fact specific area where advice matters and marketed shortcuts have been challenged.
It depends on the scale and regularity of your activity. A large, actively self managed portfolio that occupies real working time has a stronger case than a few passively let flats run through an agent. This is the pivotal question for incorporation relief and it deserves evidence, not assertion.
It can, particularly for geared portfolios where profits are reinvested: corporation tax rates stay at 19% to 25% while personal property rates rise to 22%, 42% and 47%. But the transfer costs are paid up front and the savings accrue slowly, so the answer depends on your gains, gearing, holding period and whether you need to extract the income.
You can, but incorporation relief is unlikely to apply to a single property transfer, so capital gains tax and SDLT usually both bite. Single property transfers tend to make sense only in specific circumstances, for example where there is little accumulated gain.
Talk to us before you restructure
If you are weighing incorporation ahead of the 2027 rate rises, speak to Zaman Khan, Senior Manager. The first conversation covers your gains, gearing and level of management activity, and whether the numbers genuinely support a transfer or point to staying as you are. Call 020 8554 2135 or email info@visionconsulting.co.uk, or get in touch via our contact page.
By the Vision Consulting team.
This is general information, not advice. Your position depends on your circumstances.