How to Transfer Your Property into Your Company (UK Guide)
Transferring a personally-owned property into your limited company can provide tax planning advantages, but it must be done with careful planning. There are several methods, each with different costs, risks, and benefits.
1. Sell the Property to Your Company (Standard Sale)
How it works:
You sell the property to your company at market value.
A solicitor handles the conveyancing like a normal sale.
The company becomes the legal owner.
Implications:
Capital Gains Tax (CGT): You pay CGT on any increase in value since you bought it.
Stamp Duty Land Tax (SDLT): Your company pays SDLT (including 3% surcharge for second homes).
Mortgage: Must be paid off or remortgaged into the company’s name.
Good For:
Clean transfer.
Starting a long-term property business under a company structure.
2. Transfer as a Loan to the Business (Director’s Loan Account Method)
How it works:
Sell the property to your company at market value.
Instead of paying you cash, your company owes you the value as a director’s loan.
You can withdraw this amount tax-free in future.
Still triggers:
CGT based on market value.
SDLT based on market value or outstanding mortgage.
Mortgage must be refinanced under the company.
Benefits:
Allows you to transfer equity without taking cash out.
Gives you future tax-free access to funds via the Director’s Loan Account (DLA).
3. Gift the Property to Your Company
How it works:
You transfer the property as a gift (no payment).
This is legally still a disposal at market value for tax purposes.
Implications:
CGT still applies as if sold at market value.
SDLT applies if there’s a mortgage or any consideration.
Rarely used for tax efficiency — more relevant for family or charitable transfers.
4. Use Incorporation Relief (Section 162 TCGA 1992)
How it works:
If you’re running a genuine property business (more than just a hobby or investment), you can transfer the whole portfolio to your company and defer CGT.
You receive shares in your company instead of cash.
Conditions:
You must transfer a business, not just a property.
You must be actively involved (e.g., managing multiple properties, tenants, maintenance).
SDLT still applies, unless special partnership rules apply.
Benefits:
No CGT upfront (deferred).
Business continuity and company structure advantages.
5. Use a Declaration of Trust (Transfer Beneficial Interest Only)
How it works:
You remain the legal owner, but assign the beneficial interest (e.g., rental income, proceeds of sale) to the company using a declaration of trust.
Considerations:
No legal change in ownership.
May avoid CGT and SDLT if no consideration and no mortgage.
Not always recognised by mortgage lenders.
Still must be reported to HMRC.
Good For:
Structuring income.
Early-stage planning or small-scale landlords.
Summary Table
| Method | CGT Payable? | SDLT Payable? | Mortgage Issues? | Ownership Changes? | Best For |
|---|---|---|---|---|---|
| Sell to Company | ✅ Yes | ✅ Yes | ✅ Remortgage needed | ✅ Legal ownership | Standard investors |
| Transfer as Loan to Co. | ✅ Yes | ✅ Yes | ✅ Remortgage needed | ✅ Legal ownership | Equity release + future tax-free income |
| Gift to Company | ✅ Yes | ✅ Yes (if mortgage) | ✅ May apply | ✅ Legal ownership | Family transfers, not for tax saving |
| Incorporation Relief (S162) | ❌ Deferred | ✅ Yes | ✅ May need remortgage | ✅ Legal ownership | Full-time landlords with portfolios |
| Declaration of Trust | ❌ Usually not | ❌ Usually not | ⚠️ Lender restrictions | ❌ Legal stays same | Structuring income without full transfer |
Key Things to Do Before Transferring:
Speak to a property accountant:
For CGT calculations
To assess incorporation relief
To plan DLA withdrawals
Talk to a solicitor:
For conveyancing or trust setup
For land registry changes
Consult a mortgage broker:
For Ltd Co. Buy-to-Let mortgage options
To check for lender restrictions
Which Option Is Best for You?
Ask yourself:
Do I have multiple properties? → Consider Incorporation Relief.
Do I want to access value tax-free later? → Use Director’s Loan Method.
Is my property mortgage-free? → More flexibility with sale/loan route.
Do I just want to structure rental income differently? → Use Declaration of Trust.
