Property incorporation calculator

How to read the comparison

The two columns are not the same sum done twice. Held personally, your rental profit is worked out with no deduction for mortgage interest, added to your other income and taxed at 20%, 40% or 45%, then reduced by the basic rate tax reducer. Held in a company, interest is fully deductible — Section 24 does not apply to companies at all — and what is left bears corporation tax. The money is then still inside the company. It only reaches you when it is extracted, and it is taxed again when it does.

That is why the last question matters more than any of the numbers. Retained stops at corporation tax and is the version that flatters a company most; nothing in it pays your living costs. Drawn adds dividend tax and is the fair comparison, because it leaves you in the same position as owning the property personally. Dividend rates rose on 6 April 2026 to 10.75% and 35.75%, with the additional rate unchanged at 39.35% and the allowance still £500, so any comparison you were shown before that date understates the cost of extraction.

The corporation tax line and associated companies

Corporation tax is 19% on profits up to £50,000 and 25% from £250,000, with marginal relief between the two at the 3/200 standard fraction — an effective 26.5% on every pound in that band. The part that catches landlords is that both limits are divided by the number of associated companies plus the company itself. One other company you control means dividing by two, so the small profits limit becomes £25,000 and the upper limit £125,000. Three associated companies means dividing by four: £12,500 and £62,500. Landlords who have collected an SPV per property, or who also run a trading company, are routinely caught by this — the calculator asks for the number and applies it.

The cost of getting there

This is the part that is often left out, and it is usually the part that decides the question.

Capital gains tax. Transferring property to a company you control is a disposal to a connected person at market value under ss.17–18 TCGA 1992, whatever actually changes hands. Without relief the entire latent gain crystallises immediately at 18% and 24%. Incorporation relief under s.162 TCGA 1992 can defer it by reducing the base cost of the shares, but the business must be transferred as a going concern, with all its assets, in exchange wholly or partly for shares. For transfers on or after 6 April 2026 the relief must be claimed in the transferor's Self Assessment return for the year of transfer, with brief details of the transaction, the tax computations and the type of business transferred — it is no longer automatic, and s.162A was repealed. The gate before all of that is whether your portfolio is a business at all: HMRC follows Ramsay, and its stated indicator is 20 hours or more a week personally spent on activities indicative of a business. A portfolio run by a letting agent will struggle. Size the exposure on the CGT calculator.

Stamp duty. A transfer to a connected company is charged on market value under s.53 FA 2003, not on what is paid, and the company pays the 5-point additional dwellings surcharge — plus the 17% single rate on any dwelling over £500,000 unless a relief applies, of which property rental business relief is the one most buy-to-let companies use. Where a genuine partnership already exists, paragraph 18 of Schedule 15 FA 2003 can reduce the chargeable consideration substantially, but that provision is expressly subject to the anti-avoidance rule in paragraph 24, and a jointly held portfolio between spouses is not automatically a partnership. Size it on the stamp duty calculator.

Then the ongoing side: refinancing onto commercial lending, the loss of the capital gains annual exempt amount inside a company, ATED where a dwelling is worth over £500,000, and a set of statutory accounts and a corporation tax return every year. The property company accounts page covers what that involves in practice, and the property companies page covers the associated company limits and directors' loan accounts.

When incorporating helps and when it does not

It helps where profits are retained and reinvested rather than drawn; where the portfolio is geared enough that full interest deductibility outweighs the second layer of tax; where the activity is a genuine business so s.162 relief is available; and where the stamp duty is small against the ongoing saving, or partnership relief is properly available.

It does not help where you need the income personally, because corporation tax plus dividend tax is two bites rather than one. It does not help where the portfolio is unencumbered or lightly geared, because there is little interest to shelter and Section 24 was never the problem. And it does not help where there is a large latent gain but no business, because the capital gains tax crystallises in full on day one.

A positive annual figure does not mean incorporate. It is a recurring saving set against a one-off cost that is routinely five or six figures, plus an ongoing compliance cost. The real question is how many years of saving it takes to repay the transfer, and whether you can live on retained profits while it does. Two dates move the answer in opposite directions: the April 2027 property income rates of 22%, 42% and 47% in England, Wales and Northern Ireland push the personal column up, and the April 2026 dividend increase pushes the extraction column up.

This is information, not advice, and it is not a recommendation about any property investment. The incorporation page sets the whole question out, the Section 24 calculator shows the problem this is trying to solve, and a free review gets the arithmetic done on your actual portfolio before you commit to anything.