Buy-to-Let Through Limited Company
Buy-to-let mortgages through a limited company SPV give higher-rate taxpayers full mortgage interest deductibility and corporation tax on profits - compared to the Section 24 restriction on personal name BTL.
Full interest relief and corporation tax on profits
Since the Section 24 mortgage interest relief restriction was phased in from 2017, higher-rate taxpayers holding buy-to-let in personal name pay income tax on rental income before deducting mortgage interest costs. A limited company SPV pays corporation tax on net profit after full mortgage interest deduction - a significant difference for higher-rate taxpayers building a property portfolio.
Ltd Co BTL - every aspect managed
Tax Efficiency for Higher-Rate Taxpayers
A higher-rate taxpayer receiving £2,000/month rent with £1,000 mortgage interest: personal name pays income tax on £2,000 (Section 24 credit only), net income ~£800. Ltd Co pays corporation tax on £1,000 net profit, net income ~£810+ dividend tax on extraction. The compound saving over a portfolio of 10 properties is substantial.
SPV Setup and SIC Codes
A buy-to-let SPV uses SIC code 68209 (other letting/operating of real estate) or 68100 (buying and selling). The company must be set up correctly before applying for the mortgage - lenders check the SIC code. We advise on the correct structure.
Specialist Ltd Co Lender Panel
Most specialist BTL lenders now offer limited company SPV products. The rate is typically 0.1-0.3% above the equivalent personal name product - offset by the tax efficiency for higher-rate taxpayers holding properties for 5+ years.
Portfolio Growth in Ltd Co
New acquisitions directly into a limited company avoid the SDLT and CGT costs of transferring existing personally-held properties into a company. Building the portfolio in a Ltd Co structure from the outset is the most tax-efficient approach.
HMO and MUFB in Ltd Co
Limited company SPV mortgages are available for HMO and multi-unit freehold block properties. The combination of high yield, company ownership, and specialist property type requires lenders with specific experience across all three dimensions.
Director's Loan and Profit Extraction
Directors lend capital to the SPV via a director's loan account - repaid tax-free as the company generates profit. Remaining profit is extracted as dividends. We work alongside your accountant to ensure the structure is correct.
How it works
Company setup advice
The SPV must be correctly incorporated with the right SIC code before applying. We advise on setup and co-ordinate with your accountant to ensure the structure meets lender requirements.
ICR and lender matching
The ICR is assessed on the same basis as personal name BTL - but at the limited company threshold. We run the ICR across the Ltd Co lender panel and identify the best rate for your property and income.
Application and valuation
The mortgage is in the company name. Directors are typically required as personal guarantors. We manage the full application, director guarantee, and valuation process.
Mortgage offer and completion
Typical timeline: 4 to 6 weeks from full application to mortgage offer. Company director guarantors add a small amount of additional documentation versus personal name applications.
Building your portfolio through a limited company?
Compare 130+ specialist Ltd Co BTL lenders. We advise on structure and find the best rate for your SPV - same working day response.
Frequently asked questions
Is it better to hold BTL in personal name or a limited company?
For higher-rate taxpayers holding properties for 5+ years, a limited company is typically more tax-efficient. For basic-rate taxpayers, the difference is smaller. The right answer depends on your income tax position, number of properties, and intended exit strategy - take accountancy advice specific to your situation.
What SIC code should the SPV use?
SIC code 68209 (other letting and operating of own or leased real estate) or 68100 (buying and selling of own real estate). Most lenders check the SIC code - using the wrong code can cause a decline that a correct setup would have avoided.
Do I need to personally guarantee a limited company BTL mortgage?
Yes. Most lenders require directors of the borrowing SPV to provide personal guarantees. The guarantee makes directors personally liable for the company's mortgage obligations - this is standard practice and not a barrier to the mortgage.
Can I transfer existing personally-held properties to a Ltd Co?
Yes, but this triggers SDLT on the transfer value and potentially CGT on any gain. The tax cost of transfer makes it more appropriate to transition new acquisitions into a company rather than transfer existing ones unless the portfolio is small.
Are Ltd Co BTL mortgage rates higher than personal name rates?
Typically 0.1-0.3% higher than the equivalent personal name product. For most higher-rate taxpayers, the tax efficiency of the Ltd Co structure more than offsets the small rate premium over the holding period.