Should you incorporate your BTL portfolio?
Section 24 took mortgage interest deductibility away from individual landlords. A limited company gets it back. The catch: SDLT, CGT, and lender alignment. The right answer for you depends on numbers, not opinion.
Network service: Property incorporation
Since 2020, individual landlords cannot deduct mortgage interest from rental income. Instead, they get a 20% tax credit. For higher and additional-rate taxpayers with mortgaged BTL portfolios, the result is paying tax on revenue that does not exist as profit.
A limited company is taxed differently. Mortgage interest is fully deductible against rental profits. Corporation tax (currently 19% on profits up to £50,000, 25% above £250,000, marginal between) applies to profit, and personal tax falls only on what you draw out as dividends.
The case for and against depends on tax band, mortgage balance, draw plan, exit timeline, and lender flexibility. The articles in this pillar walk through specific scenarios, the s162 incorporation relief test, and the lender questions to ask before anything moves.
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