Moving your rental properties into a limited company can be a smart long-term move, full mortgage interest relief, lower tax on retained profit, and easier succession planning. But there is a catch that stops many landlords in their tracks: Capital Gains Tax (CGT).
Where your lettings amount to a business and the statutory conditions are met, Incorporation Relief (section 162 TCGA 1992) can defer a gain into the shares you receive. This guide explains why CGT arises, the 2026/27 rates, how the relief works and the points to take advice on before a transfer. It sits alongside our main property incorporation guide.
It feels like nothing has really changed, you owned the properties before, and you own the company that owns them now. But in tax law, you and your company are two separate "persons". Transferring a property from you to your company is a disposal, and CGT applies to disposals of residential property.
Because you and the company are connected, HMRC ignores whatever price (if any) appears on paper. The disposal is treated as taking place at open market value. So even if no cash changes hands, you are taxed as though you sold each property for what it is genuinely worth on the day of transfer.