Transferring Property to Limited Company in Central London
Kevin Gold updated on 4th March 2026
Here’s a consideration for landlords with buy-to-let properties in central London. There has been a record increase in limited company ownership of rental properties year on year, primarily attributed to tax changes.
The high value of buy-to-lets in Mayfair, Primrose Hill and Marylebone, naturally appeals to landlords. However, rental properties in these desirable areas can also attract a significant Capital Gains Tax bill.
Should you transfer your buy-to-let properties to a limited company structure? The rather irritating answer to this question is: it depends. A buy-to-let in a limited company will benefit some landlords more than others, and there are pros and cons to weigh up. In this article, we’ll look at the pros and cons of transferring a property to a limited company.
What is a limited company?
A limited company is a private company where owners are given shares in the company. As a shareholder, your personal finances are separate from the limited company’s, apart from the personal guarantee often needed to secure a buy-to-let mortgage.
Why transfer property to a limited company?
Historically, landlords only needed to declare their rental income after the mortgage has been paid, with relief on finance costs. However, since April 2017, tax relief on mortgage interest has been gradually phased out. Since April 2020, landlords’ mortgage expenses have no longer been deductible from their tax bill, to be replaced by a tax credit covering 20% of your mortgage interest only. This has left many landlords significantly out of pocket.
The changes to tax relief on mortgages are why more people are considering transferring their property to a limited company. A mortgage is considered a business expense in a limited company and can be used to reduce taxable profits.
However, it’s not necessarily the most tax-efficient option for everyone. There is no substitute for professional tax advice, so we highly recommend you engage a specialist.
How to transfer property to a limited company?
You must follow the correct legal process to move a property from individual ownership to limited company ownership. If it’s not carried out properly, you could be open to legal challenges in future.
Form a company. Seek expert advice in setting up a limited company for property, if you haven’t already established one.
Conveyancing. You will need a solicitor with experience in corporate law as well as conveyancing to draft the legal transfer agreement.
Valuation. Obtain a valuation by a qualified RICS surveyor, for the transfer process and taxes.
Decision making. Settle on the property price and terms, such as issuing shares. Keep board meeting minutes as a record of your discussions and final decisions.
Mortgage. If there’s a mortgage, you will have to seek the lender’s agreement and secure a deal under the limited company. Again, keep records of the transfer process.
Registration. Register the transfer of title with HM Land Registry.
Tax liabilities. Inform HMRC, and pay Stamp Duty Land Tax and Capital Gains Tax.
The cost of transferring your property to limited company
There is a set process for transferring a property – and you must sell it to the new company at the market value of the property. Transferring a buy-to-let into a limited company will incur costs, for example:
Early redemption charges and increased mortgage costs
These costs can be too high to make moving to a limited company worthwhile for some landlords. However, others may find that the set-up costs are worth it for their potential long-term tax savings. A qualified tax advisor can help you determine the most tax-efficient option for your circumstances.
1. Capital Gains Tax
If the value of your property has increased over time, any profit will attract Capital Gains Tax (CGT). How much CGT you will be liable for will depend on your tax band and could vary between 0%, 18% or 24%.
This is a large cost, so check if you qualify for incorporation relief. Incorporation relief is a postponement or deferral of CGT. You will need to check your eligibility carefully, however, if you meet the criteria, you can defer CGT to a later date, rather than on incorporation. You can gift a property to a limited company in exchange for shares without incurring CGT, though the company will still be liable for SDLT.
2. Stamp Duty Land Tax
Limited companies pay Stamp Duty Land Tax (SDLT) second home surcharge of 5%, on top of the 17% SDLT rate on residential properties that cost over £500,000. Relief is available, though the nuances can be intricate.
For example, relief is available for developers purchasing a property through a limited company, homes exclusively for employees, and certain housing co-operatives. There can also be Business Property Relief for a property business trading for 2 years or more, as opposed to a company focused on property investments.
3. Conveyancing and legal fees
Inevitably, transferring property to a limited company will incur legal fees, often rising in line with the complexity of the move.
3. Early redemption charges and mortgage costs
Generally, it makes sense to wait until the early repayment charge period on your buy-to-let property’s mortgage has lapsed before selling your property to your limited company. Otherwise, you may be liable for early redemption charges.
Another aspect to consider is the cost of the mortgage to your limited company. Although the number of landlords converting to limited company status is growing, the number of lenders in this market is limited. Mortgages for limited companies’ properties tend to be more expensive than personal mortgages.
You may also want to consider the cost of your limited company getting a mortgage. To apply for a mortgage, your limited company’s sole purpose must be for Special Purpose Vehicles. In this case, your limited company must be registered solely for property investment.
Specific costs for transferring your property
When you transfer a property, it involves specific costs such as Stamp Duty and CGT on your profit if the property has increased in value. You will also have to pay legal fees relating to the transaction.
Advantages of transferring a buy-to-let property into a limited company
Tax benefits
Tax savings are often the main advantage, as you will pay tax on dividends taken instead of paying income tax on rental income. Your limited company will also pay corporation tax on any profits. Corporation tax rates have remained unchanged for April 2025, and the primary rate is currently 25% with a small profits rate of 19%.
As a personal landlord, the rent from your property goes directly to your bank. If this is all or part of your total income, you will be taxed according to the rules for private individuals when you file your tax return. Currently, the standard personal tax-free allowance is £12,570, although this is reduced if you are a higher-rate taxpayer with income over £100,000. Income above your personal allowance is taxed as follows:
Suppose you are operating through a limited company. In that case, your money will be paid into your company’s bank, and you can draw it out as dividends. The tax-free allowance on dividends is £500 as of 6 April 2025 (down from £1,000 between 2018 and 2023). This and your personal tax allowance will give you a total allowance of £13,570.
Any dividends paid above this total attract a tax of 8.75%. Dividends in the higher rate tax band are taxed at 33.75%. Once the figure reaches the £150,000 mark, tax goes up to 39.35%. Your personal income tax band determines the level of tax you pay on your dividends.
Although these dividend tax bands look good against the personal ones, you must consider that dividends are not considered a business expense. You will pay the current corporation tax rate of 19% if your limited company’s profits fall below £50,000, rising to 25% for companies with profits above £250,000.
Further benefits
Investing via a limited company can also protect your personal credit rating, since your credit score can be affected if your tenants don’t pay council tax or keep up with utility bills. For properties owned by a limited company, the company is contacted instead of you personally.
Disadvantages of transferring a buy-to-let property into a limited company
For some buy-to-let investors, the costs of transferring ownership we outlined above may wipe out any tax savings in the medium and long term. You will have to make mortgage arrangements at commercial mortgage rates, which are usually higher.
There are other costs involved when setting up and running a limited company, for example, you’ll need a registered office address. Then, the administration expenses required to get the company started, and the cost of accountancy fees to prepare and file yearly accounts. Remember too, that the dividends you withdraw will be subject to tax.
Alternatives to switching residential property to limited company
Transferring rental properties to a limited company isn’t cheaper for everyone, and other changes could be cost-effective. Landlords can cut costs without transferring to a limited company by reviewing other outgoings and monthly mortgage costs, so speak to a mortgage broker about remortgaging at a better rate.
Review your insurance premiums and other regular expenses such your business phone and broadband package, to ensure you’re getting good value. You may also consider transferring ownership to your partner, if they are on a lower tax bracket.
Switching to a limited company: frequently asked questions
Here are the answers to some commonly asked questions about transferring your properties to a limited company as an indication. But you should always seek detailed professional advice based on your own portfolio.
1. Can I retain control of my limited company and move property to it?
You can keep full control of your property and limited company by acting as the sole director and shareholder.
2. Are there inheritance tax benefits for owning property through a limited company?
If you pass on a property portfolio that’s owned through a limited company, this may reduce the inheritance tax bill. But there are set rules for tax relief on property businesses, such as owning the company for 2 years.
3. What are the legal implications of owning property through a limited company?
A limited company is a separate legal entity from you as an individual, even if you are the only shareholder.
Your circumstances and portfolio will determine whether transferring property ownership to a limited company is more tax-efficient.
Limited companies’ ownership may not be for you if you have just one or two properties yielding a modest income. However, it may be worth considering if you have several properties in your portfolio. But don’t decide whether to transfer property to a limited company without speaking to a qualified tax advisor for professional advice.
Considering whether to transfer property into a limited company?
Kubie Gold Associates are an independent local firm of estate agents specialising in the Rental, Sale and Property Management of Residential Property in the North-West and Central London market
