Property incorporation tax

Property incorporation tax is the catch-all term landlords use for the taxes and reliefs that apply when you move a personally held rental property business into a limited company, often to change how profits are taxed or to build a longer-term portfolio. “Incorporating” usually means transferring the rental business to a company you control, in exchange for shares, and then running the lettings through the company going forward.

The two taxes that typically drive the analysis are capital gains tax (CGT) and stamp duty land tax (SDLT). Transferring properties to a company is treated as a disposal at market value for CGT purposes, so a gain can arise even though no cash changes hands. Where the transfer is of a genuine “business”, incorporation relief under section 162 can defer the gain by rolling it into the base cost of the company shares you receive. HMRC’s current guidance explains the claims process and highlights the statutory basis in TCGA 1992 s.162, including the ability to elect for the relief not to apply in certain cases. 

SDLT is separate. The company may have SDLT to pay on the transfer. Some reliefs exist in specific structures (for example, incorporation relief for an LLP in defined circumstances), but eligibility is technical and time-limit driven, so professional advice matters. 

From an operational landlord angle, incorporation doesn’t change your day-to-day duties to the tenant. You still need compliant tenancy agreements, fair handling of repairs, and good records to reduce housing disputes. What it can change is your risk profile and time horizon. From 1 May 2026, the Renters’ Rights Act in England abolishes Section 21 notice and moves most lets onto an open-ended periodic tenancy, meaning you should expect longer holds and rely on Section 8 notice and specific grounds for possession if you ever need the property back. That can influence whether a company structure suits your strategy. 

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