Portfolio Transfer from Personal to Limited Company Name
£1,450,000 · 25 years · 5.75% fixed 5 yrs. A landlord with four properties in his personal name was paying higher-rate income tax on rental profits after the removal of mortgage interest relief.
The Client
Landlord
The Challenge
A landlord with four properties in his personal name was paying higher-rate income tax on rental profits after the removal of mortgage interest relief. His accountant had calculated that transferring to a limited company structure would save approximately £12,400 per year in income tax. However, transferring property to a limited company triggers SDLT and CGT - careful planning was essential.
Our Solution
Doulton worked alongside the client's accountant and solicitor to model the full transfer cost versus the long-term tax saving. For this client, the calculation strongly favoured transfer. The four mortgages were placed through the new SPV simultaneously, and the transfer was structured to maximise available reliefs.
The Outcome
All four properties transferred and mortgaged through the limited company. Year one tax saving: £12,400 as forecast. Break-even on transfer costs: 2.8 years. The client is now adding further properties exclusively through the company. Key highlights: Full transfer cost vs tax saving modelled with accountant; £12,400 annual income tax saving achieved; Break-even on transfer costs: 2.8 years - strongly justified transfer.