Most landlord guides frame the limited company question as a binary choice: switch the whole portfolio across, or stay in personal name. For established landlords, neither extreme works. The smarter play and what a growing number of experienced investors are quietly doing is a hybrid structure.
Why “Switching” Often Doesn’t Stack Up
Moving an existing property from personal name into a limited company is a sale in HMRC’s eyes. The bill includes:
- Capital Gains Tax on the full gain since purchase
- Stamp Duty Land Tax, including the 5% additional dwelling surcharge
- Early Repayment Charges on existing mortgages
- Re-mortgage and legal costs for every property transferred
On a typical four-property portfolio with reasonable equity, that bill can comfortably top £40,000 – often wiping out a decade of future Section 24 savings before you’ve even begun.
The Hybrid Model: Keep Old, Buy New
Rather than restructure the whole portfolio, many higher-rate landlords now run two parallel holdings:
- Existing properties stay in personal name – no transfer, no tax hit
- All new acquisitions go through a freshly incorporated SPV
- The portfolio rebalances naturally toward limited-company ownership over time
This captures the Section 24 advantage on future growth while letting legacy properties run down their mortgages and eventually be sold tax-efficiently as personal assets – using annual CGT allowances and basic-rate bands as you go.
When the Hybrid Approach Makes Sense
The split structure tends to work best if you:
- Already own two or more properties personally with meaningful capital gains
- Plan to keep acquiring – three or more purchases over the next five to ten years
- Are a higher or additional-rate taxpayer
- Want flexibility to draw income personally from older stock while reinvesting profits inside the company
Practical Setup Points
- Use a clean SPV with SIC code 68209 (or 68100/68320) – buy-to-let lenders strongly prefer it
- Ringfence the finances – never mix personal rental income with company accounts
- Expect SPV mortgage rates around 0.5–1% higher than personal BTL – build it into your yield calculations
- Director’s loans let you fund deposits into the company without immediate tax leakage
- Engage an accountant before incorporation, not after – structuring errors are expensive to unwind
Bottom Line
For most landlords with an existing portfolio and growth plans, “switch or stay” is a false choice. Running personal and limited-company holdings side by side delivers most of the tax upside with far less of the pain. Treat your ownership structure as a long-term portfolio decision, not a single switch.
