Limited Company Mortgage Calculator UK

For higher rate taxpayers with buy-to-let properties, a limited company structure can be more tax efficient. The company pays corporation tax at 25% rather than 40-45% income tax, and mortgage interest is fully deductible. However, company mortgages have higher rates, and extracting profits attracts additional tax.

A Special Purpose Vehicle is a limited company set up solely for property investment. Most BTL company mortgages require an SPV with a specific SIC code (68100 or 68209). The SPV holds the property and the mortgage, keeping property investment separate from any trading business.

Section 24 removed the ability for individual landlords to deduct mortgage interest from rental income. Instead, they receive a basic rate (20%) tax credit. Higher rate taxpayers are significantly affected. A limited company is not subject to Section 24, so mortgage interest is fully deductible against rental profits.

Higher mortgage rates (typically 0.5-1% more), additional accountancy costs (500-1,500 per year), no personal CGT annual exemption, difficulty extracting profits tax-efficiently, 3% stamp duty surcharge, and more administrative burden. For basic rate taxpayers with one or two properties, personal ownership may still be better.

Yes, but this triggers stamp duty on the transfer (including the 3% surcharge) and CGT on any gain. The cost can be significant. Its generally more tax efficient to purchase new properties through a company while keeping existing ones personally, unless the long-term tax savings justify the transfer costs.