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For property investors looking to move their portfolio into a limited company, tax efficiency is a key concern. Two major tax reliefs-Incorporation Relief (Section 162 TCGA 1992) and Partnership Relief (Schedule 15 FA 2003)-can significantly reduce the Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT) liabilities when transferring property ownership to a corporate structure.
This guide explores the key differences, benefits, eligibility criteria, and the step-by-step process for using these reliefs to incorporate a property business.
Incorporation Relief allows property investors to defer Capital Gains Tax when transferring a qualifying business into a limited company in exchange for shares. The key requirement is that the business being transferred must be an active property business, not just passive rental income.