What is a limited company (SPV) portfolio?
Many landlords hold property through a limited company, often a special purpose vehicle (SPV) set up only to own property. The company can sell its properties and pay Corporation Tax on the gains, or in some cases the shares in the company can be sold instead. The tax treatment differs significantly, so take advice from your accountant.
Read more in our guide: Selling a company or trust portfolio
Key facts at a glance
| Item | Limited company (2026 to 2027) |
|---|---|
| Tax on rental profits and gains | Corporation Tax: 19% on profits up to £50,000, 25% over £250,000, marginal relief in between |
| Mortgage interest | Fully deductible (Section 24 does not apply) |
| Dividend tax for shareholders | 10.75% basic, 35.75% higher, 39.35% additional, after a £500 allowance |
| Stamp duty on buying a dwelling | 5% higher rates surcharge; 17% flat rate over £500,000 unless a relief applies |
| Annual Tax on Enveloped Dwellings | Applies to dwellings over £500,000, but letting businesses can claim relief (a return is still needed) |
| Selling routes | Sell the properties (asset sale) or sell the company (share sale) |
What an SPV Is and Why Landlords Use One
A special purpose vehicle (SPV) is a limited company set up only to own and let property, usually with SIC code 68209 (letting and operating of own or leased real estate). Since mortgage interest relief for individuals was restricted under Section 24, many landlords have bought new properties through companies, because a company deducts its finance costs in full and pays Corporation Tax rather than income tax. Lenders offer specific SPV buy-to-let mortgages, usually with personal guarantees from the directors.
The trade-off is a second layer of tax when money is taken out, extra accounts and filing, and more complex selling options.
Two Ways to Sell a Company Portfolio
| Asset sale (company sells the properties) | Share sale (you sell the company) | |
|---|---|---|
| Tax on the gain | Corporation Tax in the company, then tax when cash is extracted | Capital Gains Tax on the shares at 18% or 24% |
| Buyer's purchase tax | SDLT on each property, usually with the 5% surcharge | 0.5% stamp duty on the share price |
| What the buyer takes on | Only the properties | The whole company, including its history, debts and tax position |
| Due diligence | Property by property | Property plus full company and tax due diligence, with warranties |
| Effect on price | Market value of each property | Often discounted for the latent tax on the properties' gains |
| Lenders | Mortgages redeemed on completion | Lender consent or refinancing needed |
After an asset sale, the company can be wound up through a members' voluntary liquidation, with the final distribution usually taxed as a capital gain rather than as dividends, subject to anti-avoidance rules. Business Asset Disposal Relief is not normally available because a letting company is an investment business.
A Simplified Example
A company owns four houses bought for £500,000 in total, now worth £800,000, giving a £300,000 gain. On an asset sale, the company would pay Corporation Tax of about £75,000 at 25%, leaving the profit in the company to be extracted by dividend or liquidation. On a share sale, the buyer would expect a discount for inheriting the latent gain, and the shareholder would pay CGT on the gain on their shares. Which route leaves more in your pocket depends on the figures, the company's other assets and the buyer, so ask your accountant to model both before marketing.
Points to Check Before Selling
- Who owns the shares, and in what proportions.
- Whether the company has other assets, loans from directors or trading history that will complicate a share sale.
- Lender terms, personal guarantees and early repayment charges.
- Whether any properties were transferred in from personal ownership, and how that was taxed.
- Confirmation statements, accounts and tax returns being up to date.
Many investor buyers prefer an asset sale because it is cleaner. Some larger buyers, and buyers of portfolios with high latent gains, will consider a share sale. Our guide to selling a company or trust portfolio covers both.
PSC does not give tax advice or advise on or arrange the sale of company shares. Any proposal involving company shares is checked by a solicitor before details are shared.
Official Sources and Further Reading
- GOV.UK: Corporation Tax rates and allowances
- GOV.UK: Tax on dividends
- GOV.UK: Annual Tax on Enveloped Dwellings
General information for landlords in England, checked against official sources in October 2026. It is not tax, legal or financial advice: speak to a qualified accountant or solicitor about your own circumstances.
Frequently Asked Questions
Many landlords hold property through a limited company, often a special purpose vehicle (SPV) set up only to own property. The company can sell its properties and pay Corporation Tax on the gains, or in some cases the shares in the company can be sold instead. The tax treatment differs significantly, so take advice from your accountant.
No. A company pays Corporation Tax on its gains, at 19% to 25% depending on its profits. The shareholders may then pay tax when they take the money out.
Yes, a share sale is possible. The buyer pays 0.5% stamp duty instead of SDLT but takes on the company's history and latent tax, so they usually carry out more due diligence and may adjust the price.
No. Companies can deduct mortgage interest and other finance costs in full from their rental profits.
Usually by dividends or by winding the company up through a members' voluntary liquidation, where distributions are normally taxed as capital gains. Take advice, as anti-avoidance rules can apply.
Thinking About Selling Your Portfolio?
Ask for a no-obligation portfolio appraisal, or call us to talk through your options in confidence.