Section 24 fully landed in 2020 and redrew the economics of higher-rate buy-to-let ownership. Six tax years in, the data is unambiguous for most portfolio landlords: limited-company ownership wins on net after-tax cashflow. But the answer is never universal, and the difference at one or two properties can be close to a wash.

This is a worked example against a real Manchester comparable we shortlisted for a client in March 2026.

The property

A two-bed apartment in a Greengate tower, £275,000 purchase price, rent £1,450 pcm, 75% LTV BTL mortgage at 5.35% five-year fix. Service charge £2,100 per year, ground rent peppercorn, management at 10% plus VAT.

The numbers

Annual rental income: £17,400 Annual mortgage interest (interest-only): £11,034 Annual costs (service charge, management, insurance, maintenance reserve): £5,340 Accounting profit before interest and tax: £12,060

Personal name, higher-rate taxpayer (40% band)

Taxable rental profit (no interest deduction): £12,060 Income tax at 40%: £4,824 Mortgage-interest tax credit (20% of £11,034): minus £2,207 Net tax: £2,617 Net cash profit after tax and debt service: £12,060 minus £11,034 minus £2,617 equals minus £1,591

The 40% taxpayer is cashflow-negative on this deal in personal name at current rates.

Limited company (SPV)

Taxable profit after interest: £12,060 minus £11,034 equals £1,026 Corporation tax at 19% (small-profits rate): £195 Net retained in SPV: £831 positive

The same deal is cashflow-positive inside an SPV.

The uplift at portfolio scale

Run the same model across 5 properties at £17,400 average rent and the 40% taxpayer is approximately £8,000 worse off per year in personal name. Across a 20-year hold, that is more than the incorporation cost ten times over.

Where personal name still wins

Three cases:

  • Basic-rate taxpayer with one or two properties. The personal-rate tax on a small portfolio (£1,000 to £2,500 per year) beats the setup and ongoing cost of running an SPV (£800 to £1,800 per year in accountancy plus incorporation tax if you are moving property in).
  • Very low-LTV or cash portfolios. Without significant interest to deduct, the SPV advantage compresses.
  • Planned short-hold resale within 3 to 5 years. SPV corporation tax on gains (19 to 25%) can exceed personal CGT (18 to 24%) depending on income band, and incorporation gains tax friction can eat 6 months of profit.

Incorporating an existing portfolio

If you already own 5-plus properties in personal name, a beneficial-interest transfer or Section 162 incorporation relief can move them into an SPV without triggering CGT, provided the portfolio qualifies as a business. Get accountancy advice from a specialist, not a general practitioner. The saving is real, the execution risk is not.

The practical takeaway

For most higher-rate taxpayers buying in 2026, new acquisitions should go into an SPV. The £800 to £1,800 annual running cost is noise against what Section 24 does to personal-name returns at current rates.

If you would like us to stress-test a specific deal through both structures, we share the spreadsheet.