1. The Double Pressure: Section 24 + the Renters' Rights Act
Higher-rate taxpayers holding properties personally face a double squeeze: paying tax on gross turnover under Section 24 — where mortgage interest is no longer a deductible expense but a 20% tax credit — while managing increased compliance costs under the Renters' Rights reforms, including the abolition of Section 21 and the shift to periodic tenancies. Inside a limited company SPV, mortgage interest remains fully deductible and profits are taxed at Corporation Tax rates of 19%–25%.
2. Personal Ownership vs. SPV: Head-to-Head
| Feature | Personal Name | Ltd Company SPV (SIC 68209) |
|---|---|---|
| Mortgage interest tax treatment | 20% basic-rate tax credit only — tax is charged on gross turnover, not real profit | 100% deductible business expense before Corporation Tax |
| Tax on rental profit | Income Tax at 20% / 40% / 45% | Corporation Tax at 19%–25% |
| Profit extraction | Taxed in full in the year earned — no timing control | Dividend extraction flexibility — time drawings around allowances |
| Inheritance Tax (IHT) planning | Property sits in the personal estate with limited reliefs | Shares can be gifted or held in trust — succession without disturbing tenancies |
| S162 Incorporation Relief | Not available — personal disposals trigger CGT | Available to genuine property businesses, deferring CGT into shares |
3. Mortgages for SPVs: The New Mainstream
More than 80% of all new buy-to-let mortgage applications are now made through Limited Company SPVs registered under SIC code 68209. Lenders have built deep specialist product ranges for corporate landlords — often with gentler stress testing (pay-rate or ~125% interest cover rather than the 145% personal standard), intercompany loan facilities for group structures, and portfolio underwriting that matches your accountant's incorporation plan. The full guide walks through lender criteria, personal guarantee expectations and how to sequence the refinance on completion.