How Do I Transfer Property from Personal Ownership into a Company

Why Transfer Property into a Limited Company

There are several reasons landlords choose to transfer property from personal ownership to a company.

• Tax efficiency: Companies pay Corporation Tax on profits (currently 25 percent for most businesses), which is often lower than higher-rate Income Tax on personal rental profits.

• Reinvestment potential: Company profits can be retained and reinvested in new properties without personal tax being triggered.

• Inheritance planning: Shares in a company can be transferred more flexibly than physical property, offering estate planning advantages.

• Limited liability: Operating through a company provides personal protection from business debts.

Despite these benefits, incorporation is not suitable for everyone. The costs, taxes, and mortgage implications must be weighed carefully before proceeding.

Step 1: Establish a Limited Company

To transfer property, you must first set up a limited company with Companies House. The process involves:

• Choosing a unique company name.

• Registering a business address in the UK.

• Appointing at least one director and one shareholder.

• Stating your company’s business activity using a Standard Industrial Classification (SIC) code such as 68209 (Other letting and operating of own or leased real estate).

Once incorporated, you will receive a Certificate of Incorporation and can open a company bank account.

Step 2: Value the Property at Market Rate

When transferring a property from personal to company ownership, HMRC treats the transaction as if you sold the property to the company at its current market value even if you do not actually exchange money.

This valuation forms the basis for calculating any tax due, including Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT). To avoid disputes, it is advisable to obtain a professional valuation from a surveyor or chartered accountant.

Step 3: Understand the Capital Gains Tax Implications

When you transfer property into a company, HMRC considers that you have disposed of it personally. You may therefore need to pay Capital Gains Tax on the increase in value since you originally bought it.

CGT rates for residential property are 18 percent for basic rate taxpayers and 24 percent for higher or additional rate taxpayers. The tax is calculated on the gain after deducting your annual CGT allowance (£3,000 for 2025–26) and allowable costs such as legal fees and improvement expenses.

Example:
If you purchased a buy-to-let property for £150,000 and it is now worth £250,000, the gain is £100,000. After applying the £3,000 allowance, £97,000 would be subject to CGT at 24 percent, resulting in a tax bill of £23,280.

If multiple properties are transferred, CGT could become substantial.

Step 4: Consider Incorporation Relief

Some landlords may be eligible for Incorporation Relief, which can defer Capital Gains Tax. To qualify:

• You must be running your property activities as a business, not simply holding investments.

• You must transfer the entire property business (including all assets and liabilities) to the company in exchange for shares.

If approved, CGT is deferred until you sell your company shares, meaning no immediate tax bill on incorporation.

HMRC generally expects landlords to demonstrate that property management is their main occupation or involves significant time and effort, typically 20 hours per week or more. This relief does not usually apply to casual landlords with one or two rental properties.

Step 5: Account for Stamp Duty Land Tax (SDLT)

The company acquiring the property must pay Stamp Duty Land Tax (or Land and Buildings Transaction Tax in Scotland and Land Transaction Tax in Wales) based on the market value at the time of transfer.

SDLT applies even if the property is transferred to your own company and no cash changes hands. The higher rate of 3 percent for additional dwellings also applies.

Example:
For a property valued at £250,000, SDLT would be approximately £10,000, including the 3 percent surcharge.

In some cases, landlords operating as a genuine partnership before incorporation may qualify for relief that exempts them from SDLT, but strict conditions apply.

Step 6: Review Your Mortgage Arrangements

Most buy-to-let mortgages are issued to individuals, not companies. If you transfer property into a limited company, you will likely need to:

• Redeem the existing mortgage and take out a new limited company buy-to-let mortgage.

• Pay associated fees, including early repayment charges and legal costs.

• Satisfy the lender’s criteria for company borrowing.

The company directors will often be asked to provide personal guarantees, as the company itself is a separate legal entity. Consulting a mortgage broker with experience in corporate buy-to-let is highly recommended.

Step 7: Update Land Registry and Legal Documentation

Once the transfer is agreed, your solicitor must register the transaction with the Land Registry, updating ownership details from your name to the company’s name.

They will also handle the conveyancing process, draft transfer deeds, and ensure any SDLT returns are submitted to HMRC within the 14-day deadline.

Keeping all legal documents, valuations, and correspondence is essential for your company records and future tax returns.

Step 8: Register for Corporation Tax and Accounting

After the company owns the property, it must be registered with HMRC for Corporation Tax within three months of starting to trade. The company will pay tax on its profits rather than you personally.

You must file:

• Annual accounts with Companies House.

• Corporation Tax returns (CT600) with HMRC each year.

• Self Assessment returns personally for any income you draw from the company as salary or dividends.

The company can also deduct allowable expenses such as mortgage interest, repairs, and maintenance before calculating taxable profit an advantage that individual landlords no longer have in full.

Step 9: Understand Ongoing Tax Benefits

Operating property through a company can offer long-term savings, particularly for higher-rate taxpayers. Benefits include:

• Paying Corporation Tax (currently 25 percent) instead of higher personal Income Tax rates of up to 45 percent.

• Retaining profits within the company to reinvest in new properties.

• Greater flexibility in income extraction through dividends.

• Potential inheritance tax advantages through structured share ownership.

However, withdrawing profits from the company still creates personal tax exposure, so a balanced strategy is important.

Step 10: Seek Professional Advice

Transferring property from personal to company ownership is complex and can trigger several tax liabilities at once. Professional advice is essential to ensure the transaction is structured efficiently and legally.

An accountant or tax adviser can:

• Assess eligibility for incorporation and SDLT reliefs.

• Calculate CGT and other costs of transfer.

• Model long-term tax outcomes of company ownership.

• Coordinate with solicitors, mortgage brokers, and valuers.

This planning ensures you understand the true cost of incorporation and that any transfer maximises your tax efficiency over time.

Summary

You can transfer property from personal ownership into a company, but the process is treated as a sale and can trigger both Capital Gains Tax and Stamp Duty Land Tax. While incorporating your property business can reduce future taxes and improve flexibility, it requires careful planning to avoid large upfront costs.

If your property activity qualifies as a business, you may benefit from Incorporation Relief to defer CGT, and partnerships may be eligible for SDLT relief. Always seek professional advice before transferring property, as each case is different.

With the right planning, incorporation can be an effective long-term strategy for growing your property portfolio and improving tax efficiency.