Moving a rental property out of your own name and into a limited company you will direct is one of the most common questions landlords ask, and one of the most commonly underestimated. It is not an administrative re-registration. In law you are selling the property to a separate legal person, and the transaction attracts Stamp Duty Land Tax, Capital Gains Tax, lender involvement and company law formalities, all in the same month.
Here is what actually happens, what it costs and where the traps are.
A company incorporated under the Companies Act 2006 is a separate legal person. Even if you own 100% of the shares and are the sole director, the company is not you. Transferring the property is a disposal by you and an acquisition by the company, and because you control the company the two of you are connected persons for tax purposes. That single point drives almost everything that follows.
Under section 53 of the Finance Act 2003, where a property is transferred to a company connected with the seller, SDLT is charged on the open market value of the property. Putting £1 on the transfer, or transferring it for nothing at all, changes nothing. The company is treated as buying at full value.
On residential property the company will also normally pay the higher rates for additional dwellings, which have been 5% above the standard rates since 31 October 2024. And where a company acquires a single dwelling for more than £500,000, a flat rate of 17% can apply unless a relief is available — the most relevant being where the property is held for a genuine property rental business, or for development or resale in a property trade.
A worked example on a £400,000 buy-to-let transferred to your own company, assuming the rental business relief applies so the flat 17% rate does not:
Non-residential and mixed-use property is charged at the lower commercial rates — 0% to £150,000, 2% to £250,000 and 5% above — with no surcharge. Different taxes apply in Wales (Land Transaction Tax) and Scotland (Land and Buildings Transaction Tax), with their own rates and rules.
Where property is genuinely held and run through a partnership, the special partnership provisions in Schedule 15 to the Finance Act 2003 can substantially reduce or remove the SDLT charge on incorporation. This is legitimate but heavily scrutinised: HMRC will test whether a real partnership existed and was actually operating, not one assembled shortly before the transfer. Do not build an appraisal around it without specialist advice and a partnership with a genuine history.
Because you and the company are connected, you are treated as disposing of the property at market value even if no money changes hands. For 2026/27 the annual exempt amount is £3,000 and residential property gains are taxed at 18% within the basic rate band and 24% above it. Where tax is due you must file a UK Property Disposal return and pay within 60 days of completion.
Section 162 of the Taxation of Chargeable Gains Act 1992 can defer the gain where you transfer the whole of a business as a going concern, with all its assets other than cash, wholly or partly in exchange for shares in the company. The gain is rolled into the base cost of the shares rather than taxed on the transfer.
The obstacle is whether letting property amounts to a business. In Ramsay v HMRC [2013] UKUT 226 (TCC) the Upper Tribunal accepted that it can, where there is a sufficient degree of activity — a serious undertaking earnestly pursued, conducted with continuity and on recognised business principles. HMRC's practice is to accept the relief where the individual personally spends around 20 hours a week or more on the activities of the business. A single flat managed by an agent will not qualify.
Note the important change: for transfers on or after 6 April 2026, incorporation relief no longer applies automatically. Section 39 of the Finance Act 2026 amends section 162 so the relief must be claimed in your self-assessment return for the tax year of the transfer, with details of the transaction, the computations and the type of business transferred, and the ability to elect out under section 162A has been repealed. The claim deadline is the first anniversary of the 31 January following the tax year in which the transfer took place. Missing the claim now means losing the relief.
A personal buy-to-let mortgage cannot simply be carried across. The existing loan must be redeemed and the company must take a new facility in its own name. In practice that means an early repayment charge if you are inside a fixed period, a new arrangement fee and valuation, a company buy-to-let product that is typically priced above the equivalent personal product, and personal guarantees from you as director. Build all of it into the appraisal before you decide.
Because you are on both sides, section 190 of the Companies Act 2006 applies: a company may not acquire a substantial non-cash asset from a director, or a person connected with one, unless the members approve it by ordinary resolution. An asset is substantial if it exceeds £100,000, or exceeds 10% of the company's asset value and is worth more than £5,000. You also need a declaration of interest under section 177 and properly minuted board approval. And if you are transferring at less than market value while personally exposed to creditors, sections 238 and 423 of the Insolvency Act 1986 sit in the background.
For a geared portfolio held for the long term by a higher-rate taxpayer who reinvests the profits, incorporation often does. For one or two lightly geared properties, or where you need the rental income to live on, the SDLT and CGT payable on day one frequently outweigh the annual saving for many years. Model it over your actual holding period before you move.
This is general information, not tax advice — the numbers turn on your own circumstances, so take specialist tax and legal advice before you commit. If you need a defensible market valuation for the transfer, speak to Giles Real Estates.