Should You Use a Limited Company for Buy-to-Let? UK Mortgage & Tax Guide (2026)

🎙️ Let’s Talk Mortgages – Limited Company Mortgages Explained

Host: Ameena Faris
Guest: Ifthikar Mohamed – Mortgage Expert (10+ years’ experience)

Ameena: Hello and welcome to Let’s Talk Mortgages. I’m your host, Ameena Faris, and today I’m joined by Ifthikar Mohamed, our mortgage expert with over 10 years’ experience in the industry.

In today’s episode, we’re talking about limited company mortgages—what they are, when to use them, and why property investors choose them. So, let’s get into it.

---

🔹 What is a client missing by staying in their personal name?

Ifthikar: That’s a great question. It really depends on the client’s circumstances.

Some people don’t lose much by staying in their personal name—especially if they’re basic-rate taxpayers and not earning too much. But if someone is approaching the higher-rate tax band, then buying through a limited company may be a better option.

You always need to look at the tax impact, the interest rates, and the client’s long-term vision. Are they building a portfolio, or are they just a casual landlord? All of that matters.

🔹 Can someone move existing properties into a limited company?

Ifthikar: You can—but there can be serious tax implications.

This is where my “accountant’s hat” goes on. Transferring properties into a company can trigger Capital Gains Tax and Stamp Duty Land Tax.

If you have a large portfolio, you may be able to move it as a “going concern” under Section 162, but it’s a very specialist area. Many people have done this blindly and ended up with big tax bills.

Always speak to a tax advisor or accountant before doing anything like this.

🔹 Are SPV mortgage rates more expensive?

Ifthikar: On paper, yes—usually about 1% higher.

But what matters is the net result. I always tell clients to do a break-even analysis: how much more interest will you pay, and how much tax will you save?

If the tax savings are higher than the extra interest, then it makes sense to use a limited company.

🔹 What is an SPV company and why do lenders prefer it?

Ifthikar: SPV stands for Special Purpose Vehicle. In property, it means a company set up only to buy and hold property.

Lenders prefer SPVs because the business activity is clear, there’s no mixing with trading income, and it gives you more mortgage options.

🔹 Can parents buy with kids in an SPV for inheritance planning?

Ifthikar: Potentially, yes. This is where ABC share structures come in.

Parents can keep control of the company, introduce children as shareholders, and plan for succession. You need a will and a plan.

🔹 Does an SPV make sense for a basic-rate taxpayer?

Ifthikar: Not always.

If someone just wants one property and isn’t earning much, it might not be worth the hassle or cost. You need to look at their tax band, their long-term goal, and whether they want to grow a portfolio.

🔹 What extra costs should clients budget for?

Ifthikar: With an SPV, you’ll need an accountant, slightly higher solicitor fees, and ongoing admin costs. These should all go into your break-even calculation.

🔹 What is Making Tax Digital (MTD)?

Ifthikar: From April 2026, if your property plus self-employed income is over £50,000, you’ll need to report income quarterly using compatible software.

This will also affect mortgage applications, as lenders may start asking for these records.

🔹 Should business owners use their trading company or an SPV?

Ifthikar: If you want better mortgage rates, more lender options, and a cleaner structure, then an SPV is usually better.

You can still link your trading company to the SPV through director’s loans, investments, or holding company structures.

---

Ameena (Closing): Thank you so much, Ifthikar. Hopefully this gives you a clear understanding of limited company mortgages and how to approach them.

There is no one-size-fits-all answer. It’s always best to speak to a mortgage expert who understands tax too, so you get a solution tailored to your circumstances.

If you have any questions, feel free to book an appointment with us. Thanks for listening, and we’ll see you next time.