The Real Cost of Moving Buy-to-Lets into a Company (2026/27)
Last updated 24 June 2026 · 9 min read · By the LandlordTaxAi Editorial Team
The short answer
Transferring personally-owned rentals into a company is a sale at market value for tax — so it can trigger Capital Gains Tax (18%/24%) on your gains and SDLT (including the 5% surcharge) on the company’s purchase. Incorporation Relief can defer the CGT if you run a genuine property business, but SDLT often still applies.
The tax saving from a company structure is real — but getting your existing properties into the company can cost tens of thousands upfront. HMRC treats the transfer as a sale at market value, even though it’s just you moving your own assets, so two big taxes can land at once.
This guide explains the real cost of incorporation in 2026/27 and the reliefs that may soften it. For how a company is then taxed, see the limited company buy-to-let calculator.
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Incorporation CGT Estimator
Estimate the Capital Gains Tax on transferring a property into a company at market value (2026/27).
Result
- Total gain
- £66,000
- Less annual exempt amount
- − £3,000
- Taxable gain
- £63,000
- CGT at 24%
- £15,120
- Net proceeds after CGT
- £50,880
Add SDLT separately. Incorporation Relief may defer CGT if you qualify. Estimate only — take advice.
The two taxes on the way in
Because you and your company are separate "persons" for tax, moving a property between you is a disposal at market value. That can crystallise two charges immediately:
| Tax | Who pays | Rough cost |
|---|---|---|
| Capital Gains Tax | You (on the gain since purchase) | 18% / 24% of the gain |
| Stamp Duty Land Tax | The company (buying from you) | Standard rates + 5% surcharge |
| Legal, valuation, setup | You / the company | Several hundred to a few thousand £ |
These apply even though no money really changes hands and you still ultimately own the properties — through the company. That upfront bill is what stops most small landlords incorporating.
Incorporation Relief: deferring the CGT
There’s a valuable relief — Incorporation Relief (section 162 TCGA 1992) — that can defer the Capital Gains Tax when you transfer a business to a company in exchange for shares.
The catch is the word "business". HMRC accepts this for landlords who run their lettings as a genuine business with real, active involvement — not passive ownership of one or two flats. Case law points to substantial time spent (often cited as around 20 hours a week). If you qualify, the gain rolls into the value of your shares instead of being taxed now.
Incorporation Relief defers CGT but does not remove SDLT. SDLT relief can apply where the business is run as a genuine partnership, but the rules are strict — this is specialist territory.
When incorporation is — and isn’t — worth it
Weigh the upfront cost against the ongoing saving. Incorporation tends to pay when the long-term Section 24 saving and reinvestment benefit outweigh the one-off CGT and SDLT.
- More likely worth it: larger, highly-geared portfolios run as a real business, with profits reinvested
- Less likely worth it: one or two low-mortgage properties, or where you’d draw all the income
- Always factor in higher company mortgage rates and extra accountancy
- Model the break-even: how many years of Section 24 saving recover the incorporation cost?
This is one of the highest-stakes decisions a landlord makes. Use the calculator above to size the gain and likely SDLT, then take professional advice before acting.
Know the cost before you move a thing
LandlordTaxAi sizes your incorporation cost — CGT on the gain and SDLT on transfer — and your break-even, so the decision is driven by numbers, not hype.
See how it worksA worked example
Raj transfers a rental worth £300,000 (bought for £200,000) into his company. He’s a higher-rate taxpayer; assume no Incorporation Relief.
| Market value (deemed sale) | £300,000 |
| Gain (£300k − £200k) | £100,000 |
| CGT at 24% (after £3k allowance) | ≈ £23,280 |
| SDLT for company (incl 5% surcharge) | ≈ £20,000 |
| Total upfront cost | ≈ £43,000+ |
Over £43,000 to incorporate one property — which is why Incorporation Relief (to defer the CGT) and careful modelling matter so much before you move anything.
Frequently asked questions
Does moving property into a company trigger tax?
Yes. It’s a disposal at market value, so it can trigger Capital Gains Tax on your gain and SDLT on the company’s purchase — even though you still own it via the company.
What is Incorporation Relief?
Relief under s162 TCGA 1992 that defers the CGT when you transfer a property business to a company for shares. The gain rolls into your shares rather than being taxed now.
Do I qualify for Incorporation Relief?
Only if your lettings are a genuine business with active involvement — not passive ownership. Case law suggests substantial time (often ~20 hours a week). Take advice.
Does Incorporation Relief remove SDLT?
No. It defers CGT only. SDLT can still apply, though partnership relief may help where the business is genuinely run as a partnership.
Is incorporation worth it for one property?
Usually not. The upfront CGT and SDLT often outweigh the saving for small, low-geared portfolios. It favours larger, highly-geared businesses that reinvest.
What other costs are there?
Higher company mortgage rates, company accountancy and filing, valuations and legal fees — all on top of the CGT and SDLT.
Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 24 June 2026 · Researched against primary UK sources for the 2026/27 tax year: https://www.gov.uk/guidance/capital-gains-tax-rates-and-allowances; https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property; https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65700. This article is informational only and does not constitute tax advice. Check the latest details on GOV.UK or with a qualified accountant.