Guide · 11 min read
The Section 24 maths, the corporation tax impact, the SPV pricing premium, and when a limited company actually beats holding BTL personally.
Written by Matt Lenzie · Published 19 May 2026
Advice from
Matt Lenzie · 25+ year career banker (Bank of Scotland, Lloyds Banking Group). £300m+ raised for property clients.
25+ year career banker (Bank of Scotland, Lloyds Banking Group). £300m+ raised for property clients.
"Should I buy this through a limited company or in my own name?" is now the most common question landed at our broker desk. Since Section 24 fully bit in 2020, the personal-name route stopped being the default for higher-rate taxpayers, and the limited-company SPV (Special Purpose Vehicle) has gone from niche structure to mainstream choice.
But the SPV isn't automatically right. The decision is driven by your tax band, your leverage, your intended hold period, your extraction plan, and whether you're building a portfolio or holding a single property. This guide walks through the comparison with worked numbers.
An SPV is a UK limited company set up purely to hold one or more buy-to-let properties. The company has its own bank account, files its own accounts at Companies House, pays its own corporation tax, and owns the property in its name. You, the director and (usually) sole shareholder, own the company.
Three things distinguish an SPV from any other limited company:
Setup cost is small, typically £150-£400 with a property-specialist accountant including the SIC-code and articles work. Lenders accept brand-new SPVs (incorporated specifically for the case) without trading history.
This is the heart of the comparison.
£250,000 property, £180,000 BTL mortgage at 5.5%, £15,000 annual rent, £3,000 other costs (letting agent, insurance, voids). Borrower is a higher-rate (40%) taxpayer.
| Personal name | SPV (extract all as dividends) | SPV (retain in company) | |
|---|---|---|---|
| Gross rent | £15,000 | £15,000 | £15,000 |
| Other costs | −£3,000 | −£3,000 | −£3,000 |
| Mortgage interest (£180k × 5.5%) | (not deductible) | −£9,900 | −£9,900 |
| Taxable profit | £12,000 (rent − costs) | £2,100 | £2,100 |
| Tax due | £4,800 (40% × 12,000) − £1,980 (20% × 9,900 credit) = £2,820 | CT £399 (19% × 2,100) + Div tax £540 (33.75% × 1,600) = £939 | CT £399 only = £399 |
| Cash after tax (to investor) | £12,000 − £9,900 mortgage − £2,820 tax = £−720 | £2,100 profit − £939 tax = £1,161 | £1,701 retained inside company |
The personal-name landlord on this case is genuinely cash-flow negative after tax. The SPV-extract case clears £1,161; the SPV-retain case clears £1,701 inside the company. Over a 10-year hold, the SPV-retain compounds, the difference is six-figure.
This is why higher-rate, leveraged landlords have largely moved to SPV. Section 24 didn't just slightly disadvantage personal-name, it can flip the deal from profit to loss.
Same property, same mortgage, same rent and costs. Borrower is basic-rate (20%) taxpayer.
| Personal name | SPV (extract all) | |
|---|---|---|
| Taxable profit | £12,000 | £2,100 |
| Tax due | £2,400 (20% × 12,000) − £1,980 (credit) = £420 | CT £399 + Div tax £140 (8.75% × 1,600) = £539 |
| Cash after tax | £12,000 − £9,900 − £420 = £1,680 | £2,100 − £539 = £1,561 |
The basic-rate landlord is roughly £100/year better off in personal name. The SPV overhead (slightly higher mortgage rate, accountant fees, the dividend tax on extraction) eats the corporation-tax advantage. Personal name is the right answer here.
The crossover is typically around the higher-rate threshold or when leverage is high. Run our calculator for your specific numbers.
The headline tax comparison is the start, not the end. Five other things matter:
1. Inheritance and succession. SPV shares transfer to heirs via Companies House, relatively clean, with potential business property relief depending on structure. Personal-name BTL transfers via the estate, triggering inheritance tax (40% above the nil-rate band) and stamp duty on the property side. For multi-property portfolios, the SPV is usually the cleaner inheritance vehicle.
2. Mortgage pricing premium. SPV mortgages cost roughly 0.20-0.40% more than personal-name equivalents at the same LTV. On a £200,000 loan that's £400-£800 extra interest per year. For higher-rate landlords this is dwarfed by the Section 24 saving. For basic-rate landlords it isn't.
3. Lender pool. Around 60-70% of BTL lenders quote on SPV cases now (up from ~30% in 2018). The market is mature. The remaining 30-40%, including some attractive small building societies, only lend personally. If your case needs the broadest possible competition, personal name still has more lenders.
4. Cost overhead. SPVs need annual accounts, corporation tax returns, and a confirmation statement filed at Companies House. Typical annual cost with a property-specialist accountant: £400-£900 per SPV. Not material on a single decent-yield BTL; meaningful on a thin-margin case.
5. Director's loan account mechanics. Money you put into the SPV (deposit, refurbishment costs, fees) sits as a director's loan. The SPV owes you that money. As the company generates profit and accumulates cash, you can repay the director's loan to yourself tax-free. This is a powerful long-term planning mechanism, one of the underrated reasons higher-rate landlords prefer the SPV.
If you already hold BTL personally and want to move it into an SPV, you're proposing a property sale-and-purchase between yourself and your SPV. That triggers:
For most landlords, these costs together make incorporating an existing portfolio uneconomic. Two narrow exceptions:
If you're at the start of building a portfolio and considering personal vs SPV: easier to start in the right structure than to migrate later. New purchases go straight into the SPV.
Start with SPV if any of these are true:
Stay in personal name if all of these are true:
Most cases sit clearly on one side or the other. The genuinely ambiguous ones, moderate leverage, mid-band taxpayer, single property, benefit from running the comparison both ways and seeing where the 5- and 10-year cash flow lands. Run the calculator or book a 15-minute call and we'll model your specific case.
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