SPV and Property Company Accountants in Harrow

Pre-incorporation analysis comes first. Whether to hold property personally or through a limited company depends on portfolio size and finance costs (the bigger the Section 24 cost, the stronger the case), the intended hold period (a longer hold spreads the stamp duty land tax cost over more years), capital growth or income strategy, inheritance tax planning, and refinance timing. We run the comparison for each higher-rate landlord and set out the numbers both ways. Our property incorporation guide explains the mechanics.

Stamp duty land tax is the largest single cost when existing property moves into a company. The transfer is treated as a purchase at market value, and because the buyer is a company the 5% additional-property surcharge applies to every property. Multiple Dwellings Relief was abolished for completions from 1 June 2024, so the bill is now worked out property by property. Two options are still worth checking: the choice to use non-residential rates when six or more dwellings are bought in a single transaction, and the special rules for property held through a genuine partnership. Our guide to stamp duty land tax strategies for property investors covers both.

Capital gains tax applies on the personal side of the transfer, at 18% within the basic-rate band and 24% above it. Incorporation relief under section 162 of the Taxation of Chargeable Gains Act 1992 can defer that gain, but only where the letting amounts to a business rather than passive investment, so the facts have to support it. The company then holds each property at its market value on the day of transfer.

Corporation tax on rental profit is 19% up to £50,000 of profit, 25% above £250,000, with marginal relief in between. Mortgage interest is fully deductible in a company because Section 24 applies only to individuals. Profits reach you as dividends, taxed from 6 April 2026 at 10.75% in the basic-rate band, 35.75% in the higher-rate band and 39.35% at the additional rate, after the £500 dividend allowance. We prepare the annual accounts and the CT600 corporation tax return together so the dividend plan is set before the year ends, not after.

Dividend timing is a real piece of tax planning for higher-rate landlords. Taking dividends that push total income past £100,000 starts withdrawing the personal allowance, which creates an effective marginal rate above 60% on that slice. We look at your other income before each year-end and recommend a draw that keeps the overall income tax and dividend tax bill down.

Company law filings run alongside the tax. Annual accounts go to Companies House within 9 months of the year-end, the corporation tax return to HMRC within 12 months, and the tax is paid 9 months and 1 day after the year-end. A confirmation statement is due every year, and since 18 November 2025 every director has to verify their identity with Companies House. Most property SPVs file micro-entity accounts under FRS 105; for financial years starting on or after 6 April 2025 a company qualifies if it meets two of turnover up to £1 million, balance sheet up to £500,000 and no more than 10 employees.

Two further points catch new property companies. Lenders usually want the company registered with a property SIC code such as 68100, 68209 or 68320. A company that owns a home worth more than £500,000 must file an Annual Tax on Enveloped Dwellings return by 30 April each year, even when a rental business relief brings the charge to nil. Limited companies sit outside Making Tax Digital for Income Tax, but any income you hold personally alongside the company does not.

Stamp duty on incorporation after June 2024. Plans drawn up before Multiple Dwellings Relief was abolished often relied on it to cut the bill. Any incorporation still waiting to complete needs the stamp duty land tax recalculated without it.

Interest on an overdrawn director's loan. If a director borrows more than £10,000 from the company and pays less than HMRC's official rate of interest (3.75% from 6 April 2025, reviewed during the year), the shortfall is a taxable benefit in kind for the director and the company owes Class 1A National Insurance on it. A written loan agreement with a commercial rate avoids the problem.

Section 455 charge. A director's loan made on or after 6 April 2026 that is still outstanding 9 months after the year-end triggers a corporation tax charge of 35.75% of the balance under section 455 of the Corporation Tax Act 2010. HMRC repays it once the loan is cleared, but it is a cash-flow hit in the meantime. We flag the deadline well before it arrives.

Lender covenants. Many SPV mortgages carry covenants on interest cover or on paying money out of the company. We check the covenant position before recommending a dividend.

Two layers of tax on a sale. Moving property into a company triggers capital gains tax at 18% or 24% on the personal gain. When the company later sells, corporation tax applies to the gain over the transfer value, and getting the money out costs dividend tax on top. Sometimes that is worse than holding and selling personally and sometimes better, so both routes need modelling before you commit.

Deadlines on a different cycle. A company year-end rarely matches the 5 April tax year, so the accounts, corporation tax return, payment date and confirmation statement all fall at different times from your personal Self Assessment tax return. We put every date for the company and for you personally on one calendar.