Limited company buy to let UK - how the structure works
The standard vehicle is a Special Purpose Vehicle (SPV) - a limited company whose only activity is holding and letting property, registered under SIC codes 68100 or 68209. Lenders prefer SPVs to trading companies because the risk is clean: no other business activities can drag the property into difficulty. An SPV mortgage UK lenders offer works exactly like a personal buy to let mortgage - the company borrows, the property secures the loan - with directors giving personal guarantees.
Setting up the SPV costs little and takes a day. The real decisions are around who holds the shares (including family members for income distribution and inheritance planning) and how you extract profits.
Buy to let through limited company tax UK - the real differences
The buy to let through limited company tax UK position in 2026 differs from personal ownership in four fundamental ways:
- Mortgage interest - fully deductible against rental income in a company; restricted to a 20% basic-rate credit in personal names (Section 24)
- Tax rate on profits - corporation tax at 19–25% versus income tax at up to 45% for personal ownership
- Profit extraction - dividends and salary from a company attract personal tax when withdrawn; profits retained for reinvestment stay at corporation tax rates
- Capital gains - companies pay corporation tax on gains with no annual exemption; individuals get the CGT allowance and residential rates
The pattern that emerges: higher-rate taxpayers reinvesting profits win decisively in a company; basic-rate taxpayers drawing all the income often do not. Existing personally-held portfolios face SDLT and CGT on transfer into a company, which is why incorporation is primarily a decision for new purchases. Take advice from a property tax specialist on your specific numbers before structuring.
Limited company BTL mortgage rates UK in 2026
Limited company BTL mortgage rates UK lenders charge have converged sharply with personal rates as the market has matured - but pricing structure still differs in ways that matter.
What to expect from the 2026 limited company BTL market:
- Rates typically 0.1–0.4% above equivalent personal BTL products - and identical with some specialist lenders
- Wider stress-test headroom - companies are tested at 125% ICR versus 145% for higher-rate personal borrowers
- Personal guarantees from directors are standard on every loan
- Product fees are sometimes higher - compare total cost, not headline rate
- Portfolio landlords and first-time company borrowers are both well served across 200+ lenders
Limited company BTL mortgage rates UK sit close to personal pricing in 2026 - and the gentler 125% stress test often lets companies borrow more. Money Pilot compares the whole market at zero broker fees.
The borrowing advantage - why companies often borrow more
Because rental profits in a company are taxed at corporation tax rates, lenders stress-test company borrowing at 125% interest coverage rather than the 145% applied to higher-rate personal borrowers. On a property renting at £1,250 per month, that difference typically supports £20,000–£30,000 of additional borrowing - often the deciding factor in competitive purchases. See our full guide to the buy to let stress test UK for the complete calculation.
Who should use a limited company - and who should not
Incorporation usually wins for:
- Higher and additional-rate taxpayers with meaningful mortgage interest
- Landlords building a portfolio and reinvesting profits rather than drawing them
- Families planning income distribution or inheritance through share structures
- Investors expecting to hold long term
Personal names often remain better for:
- Basic-rate taxpayers, especially with little or no mortgage
- Landlords who draw all rental profits as income each year
- Owners of one or two properties with no expansion plans
- Anyone planning to sell within a few years and use the CGT allowance
Running the SPV in practice
Day to day, an SPV is light-touch: a company bank account for rent and mortgage payments, annual accounts and a confirmation statement to Companies House, and a corporation tax return. Accountancy costs of £500–£1,200 a year are typical for a small property company and are themselves deductible. Keep the company strictly to property - mixing in trading activity narrows your lender choice and complicates every future application.
Moving an existing portfolio into a company
Transferring personally-held property into a company is a sale at market value: SDLT (with the 3% surcharge) and CGT both apply, and the properties need refinancing onto company products. For larger portfolios run as a genuine business, incorporation relief can defer CGT - a specialist tax question. For most landlords the practical answer is simpler: keep existing properties as they are, and buy everything new through the company.
Disclosure: Money Pilot Ltd (FRN: 968705) is an Appointed Representative of Yellow Stone Finance Group Ltd which is authorised and regulated by the Financial Conduct Authority (FRN: 814533). Yellow Stone Finance Group Ltd is a credit broker not a lender. Money Pilot Ltd is Registered in England and Wales No: 13621432. You should always make sure you are able to afford any repayments as late or missed payments can affect your credit rating and access to future finance.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
