The question ” Sell my house to my limited company UK” is a common one that many landlords and property investors are now asking. Following tax changes such as Section 24 of the Finance Act 2015, operating rental property through a limited company structure has become increasingly popular. However, selling property to your own company involves Capital Gains Tax (CGT), Stamp Duty Land Tax (SDLT), mortgage restructuring and strict HMRC rules.
This guide explains how selling your house to your limited company works, the tax implications including Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT), mortgage considerations, director’s loan accounts, advantages and risks, and when it may or may not make financial sense.
Can You Legally Sell Your House to Your Limited Company in the UK?
Yes, it is legal to sell your house to your limited company in the UK. However, HMRC treats this as a transaction between “connected persons.” This means:
- The sale must take place at full market value.
- You cannot artificially reduce the price to minimise tax.
- The transaction is treated the same as selling to an unrelated third party for tax purposes.
Even though you control both sides of the transaction, it is still legally considered a sale. A solicitor or conveyancer must handle the legal process, and standard buying and selling procedures apply.
Why Are Landlords Selling Property to Limited Companies?
The main reason landlords consider selling property to a limited company is tax efficiency, particularly following Section 24 of the Finance Act 2015.
The Impact of Section 24
Section 24 restricted mortgage interest relief for individual landlords. Instead of deducting mortgage interest before calculating profit, landlords now receive only a basic rate (20%) tax credit. This has significantly affected higher-rate taxpayers.
For example, a landlord earning rental income of £20,000 with £12,000 mortgage interest previously paid tax only on £8,000 profit. Now, tax is calculated on the full £20,000, with only a 20% credit applied to the interest. This pushes some landlords into higher tax brackets.
In contrast, a limited company can deduct full mortgage interest as a business expense before calculating corporation tax.
Other reasons landlords consider limited company ownership include:
- Long-term portfolio growth
- Retaining profits within the company
- Estate planning flexibility
- Limited liability protection
Is It a Sale or a Transfer and Why Does It Matter?
Selling your house to your limited company is legally a sale, not a transfer. This distinction is important because:
- Capital Gains Tax may apply.
- Stamp Duty Land Tax may apply.
- Mortgage redemption may be required.
- Legal conveyancing is necessary.
Even if no physical money changes hands, HMRC treats it as a disposal at market value.
Capital Gains Tax (CGT) When Selling to Your Limited Company
When you sell property to your limited company, Capital Gains Tax may apply on the difference between:
- The original purchase price
- The current market value
Because it is a connected party transaction, CGT is calculated based on market value, even if you sell that amount below.
CGT Rates for Residential Property
- 18% for basic rate taxpayers
- 24% (current higher residential CGT rate as per recent updates) or prevailing higher rate depending on band
If the property was your main residence, Private Residence Relief may reduce or eliminate CGT liability.
Incorporation Relief
In some cases, landlords running a genuine property business may qualify for incorporation relief. This can defer CGT rather than eliminate it. However, eligibility depends on:
- Scale of operations
- Level of activity
- Whether it qualifies as a business rather than passive investment
Before deciding to sell my house to my limited company UK, you must calculate the potential Capital Gains Tax and Stamp Duty Land Tax liabilities.
Professional tax advice is strongly recommended here.
Stamp Duty Land Tax (SDLT) When Your Company Buys the Property
When your limited company purchases the property from you, SDLT is payable.
Key points:
- Companies pay residential SDLT rates.
- The 3% additional property surcharge applies.
- SDLT is calculated on market value, not discounted price.
This can represent a significant upfront cost and must be factored into your decision.
Corporation Tax and Dividend Tax After the Sale
Once the property is owned by your limited company:
- Rental profits are subject to Corporation Tax (currently up to 25% depending on profit levels).
- Mortgage interest is fully deductible as a business expense.
However, if you wish to extract profits personally, you may face:
- Dividend tax (rates vary depending on income band)
- Income tax if taking salary
This means while company taxation may be lower initially, extracting funds requires planning.
Mortgage Implications When Selling to Your Own Company
If the property has an existing mortgage, it must usually be redeemed before completion.
Important considerations:
- You cannot transfer or “port” a personal buy-to-let mortgage to a limited company.
- The company must apply for a new limited company buy-to-let mortgage.
- Early Repayment Charges (ERCs) may apply.
- Lenders apply stress testing rules to company mortgages.
- Mortgage interest rates may be slightly higher for limited companies.
If the company cannot obtain a mortgage immediately, bridging finance may be required which carries higher interest costs.
Many landlords who want to sell my house to my limited company UK are surprised to learn that their existing mortgage cannot simply be transferred.
Director’s Loan Account Explained
When you sell property to your limited company at market value, the company may owe you money. This creates a Director’s Loan Account (DLA).
Example:
- Property value: £300,000
- Outstanding mortgage: £180,000
- Equity: £120,000
If the company buys the property and assumes financing, the £120,000 may be credited to your director’s loan account. This can later be repaid to you tax-free (as it is repayment of a loan, not income).
This structure is one of the strategic reasons landlords incorporate.
Step-by-Step Process of Selling to Your Limited Company
- Set Up a Special Purpose Vehicle (SPV)
Most property investors use an SPV registered with appropriate SIC codes such as 68100 or 68209. - Obtain a Market Valuation
A professional valuation (often RICS registered) supports compliance with market value rules. - Appoint a Conveyancing Solicitor
Legal documentation is required for both sides of the transaction. - Apply for a Limited Company Buy-to-Let Mortgage
The company must secure finance independently. - Exchange and Complete
Completion should ideally occur simultaneously to avoid financing complications.
Pros of Selling Your House to a Limited Company
- Full mortgage interest deductibility
- Corporation tax rates lower than higher personal income tax bands
- Ability to retain profits within company
- Limited liability protection
- Estate planning flexibility
- Creation of director’s loan account
Cons and Risks to Consider
- Capital Gains Tax may apply immediately
- Stamp Duty Land Tax cost
- Mortgage arrangement fees and potentially higher rates
- Ongoing accountancy and administrative costs
- Dividend tax when extracting profits
- Complexity of compliance
This decision requires careful financial modelling rather than assumption.
Personal Ownership vs Limited Company Ownership
| Factor | Personal Ownership | Limited Company Ownership |
| Tax on profits | Income tax up to 45% | Corporation tax up to 25% |
| Mortgage interest relief | Restricted (Section 24) | Fully deductible |
| Profit extraction | No dividend tax | Dividend tax may apply |
| Administration | Lower | Higher (accounts, filings) |
| Liability | Personal | Limited |
When Does It Make Financial Sense?
Selling your house to your limited company may make sense if:
- You are a higher-rate taxpayer.
- You own multiple rental properties.
- You plan to grow a long-term portfolio.
- You intend to reinvest profits.
- You are concerned about personal liability.
When Might It Not Be Worth It?
It may not be suitable if:
- You own a single low-profit property.
- CGT liability is substantial.
- You plan to sell the property soon.
- The SDLT cost outweighs future tax savings.
- Mortgage refinancing is difficult.
Each case depends on numbers rather than theory.
Alternatives to Selling to Your Limited Company
Instead of selling an existing property, you may consider:
- Purchasing future properties through a limited company instead.
- Restructuring via partnership before incorporation.
- Selling some properties to reduce leverage.
- Obtaining tailored tax planning advice.
Sometimes gradual restructuring is more efficient than immediate sale.
Frequently Asked Questions
Do I pay Stamp Duty if I sell to my own company?
Yes. Your limited company must pay SDLT based on market value, including the 3% surcharge.
Can I avoid Capital Gains Tax?
Not automatically. CGT applies based on market value. Incorporation relief may defer tax in certain circumstances.
Can I sell below market value?
No. HMRC requires connected party transactions to be valued at market rate.
Can I live in a property owned by my limited company?
Generally, limited company buy-to-let mortgages prohibit owner occupation. Living in it could breach lender terms.
Is it better to buy new properties through a limited company instead?
In many cases, purchasing new investments via a limited company is simpler than transferring existing properties.
Do I need an SPV?
Most lenders prefer a Special Purpose Vehicle company specifically set up for property investment.
Final Thoughts
So, can you sell your house to your limited company in the UK? Yes — but it is not a simple internal transfer. It is a formal sale subject to Capital Gains Tax, Stamp Duty Land Tax, mortgage restructuring and compliance rules.
For some landlords, especially higher-rate taxpayers building long-term portfolios, operating through a limited company can provide strategic tax advantages and greater structural flexibility. For others, the upfront costs may outweigh the benefits.
Before making a decision, it is essential to run detailed financial projections and seek advice from a qualified accountant or tax specialist.
If you are considering restructuring your property ownership or exploring your selling options, professional guidance can help you assess whether selling, refinancing, or restructuring is the right path for your circumstances.
Ultimately, deciding whether to sell my house to my limited company UK depends on your tax position, portfolio size and long-term investment strategy.
