Ever since Section 24 restricted mortgage interest relief, thousands of landlords have turned to Limited Company SPVs. But is an SPV always better? Led by an ACCA-qualified accountant, we compare Corporation Tax against Income Tax, reveal the 4 hidden commercial costs, and show you exactly which route maximizes your net wealth.
Enter your rental figures below to see the impact of Section 24 mortgage restrictions versus 100% corporate interest deductibility.
There is no single "right" answer for every investor. The optimal structure depends on your personal income tax bracket, mortgage gearing, and long-term investment horizon.
| Tax & Commercial Feature | Personal Name Ownership | Limited Company (SPV) |
|---|---|---|
| Mortgage Interest Relief | Restricted to a 20% basic rate tax reducer (Section 24). Higher-rate taxpayers suffer severe phantom profits. | 100% deductible as an allowable business expense before Corporation Tax. |
| Headline Tax Rates | Income Tax: 20%, 40%, or 45% on net rental income. | Corporation Tax: 19% to 25% on net rental profit. |
| Reinvesting Profits Into More Properties | Full personal income tax is paid every year, whether you withdraw the money or leave it in your bank. | Zero personal tax on profits retained inside the company to fund your next property deposit. |
| Taking Cash Out To Spend Personally | Already personal income—freely spendable without further tax. | Double taxation: Company pays Corporation Tax first, then you pay Dividend Tax (10.75% basic / 35.75% higher) on withdrawals. |
| BTL Mortgage Rates & Lender Fees | Generally lower interest rates and standard 1%–2% lender arrangement fees. | Commercial SPV rates are typically 0.5%–1.5% higher, with arrangement fees of 1.5%–3%. |
| Stamp Duty (SDLT) Surcharge | Subject to the higher rates for additional residential properties. | Subject to the higher rates for corporate residential purchases. |
| Inheritance Tax & Succession Planning | Property value is fully inside your taxable estate (40% IHT above nil-rate bands). Difficult to gift without triggering CGT. | Can issue alphabet shares to family members or pass shares gradually to reduce future Inheritance Tax. |
| Annual Compliance Requirements | One annual Self-Assessment return (SA100 + SA105 schedule). | Companies House statutory accounts, Corporation Tax return (CT600), and annual Confirmation Statement. |
Many online commentators suggest a limited company is always better. Before setting one up, consider these four vital commercial factors:
Commercial lenders charge approximately 0.5% to 1.5% higher interest rates on SPV mortgages than personal BTL mortgages, plus arrangement fees often starting at 1.5% to 3% of the loan amount.
The money inside your company is not your personal cash. You must pay 19%–25% Corporation Tax first, and then pay Dividend Tax (10.75% or 35.75%) when withdrawing it for personal living expenses.
A limited company requires formal Companies House accounts, an annual Confirmation Statement, and a CT600 Corporation Tax return. Accountancy fees are higher than a simple Self Assessment.
Directors must still provide personal guarantees for SPV mortgages. Lenders hold you personally liable if the company defaults, meaning "limited liability" does not shield your credit score or personal assets.
Everything you need to incorporate, structure, and maintain a tax-compliant property investment company.
Complete formation of a dedicated property investment vehicle with lender-compliant SIC codes.
Complete annual corporate tax compliance and Companies House filing for single-property SPVs.
1-on-1 strategic modelling comparing personal vs. company purchase for your specific target property.
Straight answers to common property incorporation questions.
Written by an ACCA-qualified accountant in Hayes to help landlords, business owners, and sole traders navigate HMRC rules with complete confidence.
10 clear scenarios explaining exactly when UK law requires you to notify HMRC and register for a tax return.
Learn gross income threshold rules (>£50k in April 2026, >£30k in April 2027), quarterly updates, and compliant software.
Every allowable residential rental deduction categorized: repairs, safety certs, management fees, and Section 24 costs.
Simplified mileage logs, flat-rate home office claims, equipment write-offs, and professional fee deductions.
Speak with an ACCA-qualified property tax accountant. We will analyze your tax band, project your post-tax returns, and advise whether an SPV or personal purchase is best.