Moving property you own personally into a limited company can make sense for landlords and business owners, particularly where profits are high and will be reinvested. But it is not a simple change of name on the title. In law it is a sale to the company at market value, which can trigger Land and Buildings Transaction Tax, the Additional Dwelling Supplement and Capital Gains Tax before any long-term savings arrive. This guide explains how a transfer works in Scotland, what it costs and when it is worth considering.
In brief
- A transfer to a company you control is treated as a sale at market value, even if the company pays nothing.
- In Scotland the company pays LBTT, not Stamp Duty Land Tax, and for residential property the 8% Additional Dwelling Supplement usually applies too.
- You may face Capital Gains Tax on any increase in value, unless incorporation relief or another relief applies.
- The main benefits are Corporation Tax rates, full relief for mortgage interest and flexibility in how profits are taken.
- For many landlords it is cheaper to buy future properties through a company than to move existing ones.
Why people consider it
- Lower tax on retained profits. Company profits are taxed at 19% to 25% Corporation Tax, compared with the Scottish higher, advanced and top rates of income tax that many individual landlords pay.
- Mortgage interest. Individual landlords of residential property only receive a basic rate tax credit for finance costs, while a company can usually deduct its interest in full.
- Flexibility. Profits can be left in the company to fund further purchases and drawn as salary, dividends or loan repayments when it suits you.
- Succession. Shares are easier to pass gradually to family members than individual properties, although this does not by itself remove inheritance tax.
- Limited liability. The company, rather than you personally, is responsible for its debts, subject to any personal guarantees you give to lenders.
LBTT and the Additional Dwelling Supplement
Property in Scotland is subject to Land and Buildings Transaction Tax, not Stamp Duty Land Tax. Where you transfer property to a company you are connected with, LBTT is normally charged on the market value of the property, whatever price the company actually pays.
For residential property there is a second charge. A company buying a dwelling worth £40,000 or more almost always pays the Additional Dwelling Supplement, currently 8% of the whole price, on top of standard LBTT. That makes transferring an existing buy-to-let portfolio expensive.
Worked example
Transferring a £200,000 rented flat to your company
- LBTT: first £145,000 at 0%£0
- LBTT: remaining £55,000 at 2%£1,100
- Additional Dwelling Supplement: 8% of £200,000£16,000
Total LBTT: £17,100, before any Capital Gains Tax, legal fees or mortgage costs. Based on 2026 to 2027 residential rates.
Commercial property is taxed at the non-residential rates instead, with no Additional Dwelling Supplement, as explained in our guide to commercial property LBTT. Where property is held by a genuine partnership, special partnership rules can reduce the LBTT on a transfer to a company owned by the same partners, but they are complex and subject to anti-avoidance rules, so specialist tax advice is essential.
Capital Gains Tax
Because the transfer is treated as a disposal at market value, you may have a Capital Gains Tax bill on any increase in value since you bought the property. Gains are taxed at 18% or 24% depending on your income, after the £3,000 annual exempt amount. Gains on UK residential property must normally be reported and the tax paid within 60 days of completion.
Incorporation relief can defer the gain where a whole business is transferred to a company in exchange for shares. For property, HMRC will only accept this where the letting activity amounts to a genuine business, which usually means a substantial portfolio actively managed by the owner, rather than simply holding a few let properties. Many advisers recommend seeking HMRC clearance before relying on it.
Ongoing tax and costs
- Taking money out. Profits paid out as dividends are taxed again in your hands, at up to 39.35%. Where the company owes you money, for example because the purchase price was left outstanding as a director’s loan, you can draw that sum back without further tax.
- Mortgages. Existing personal mortgages normally have to be redeemed, possibly with early repayment charges. Company buy-to-let lending is widely available but often at higher rates, and lenders usually want personal guarantees from the directors.
- Annual Tax on Enveloped Dwellings. Companies owning residential property worth more than £500,000 must consider ATED. Relief is available for genuine letting businesses, but a return is still required.
- Running a company. Annual accounts, a confirmation statement, a Corporation Tax return and accountancy fees.
- Inheritance tax. Shares in a company that mainly holds investment property do not usually qualify for Business Relief, so moving property into a company does not on its own reduce inheritance tax. Family company structures can help with planning, but need careful advice.
The legal process in Scotland
- Tax and structure advice from an accountant or tax adviser, modelling the costs and savings over a realistic period.
- Setting up the company, with suitable Articles of Association and, if family members are involved, a shareholders’ agreement.
- Arranging finance with a lender willing to lend to the company, and redeeming the existing loan.
- The transfer by disposition from you to the company, registered in the Land Register of Scotland, with any new standard security for the lender.
- The LBTT return, submitted and paid within 30 days of the date of entry.
- Letting admin, including registering the company as a landlord through Scottish landlord registration, telling tenants who their new landlord is and updating tenancy deposit records.
Business premises
Business owners often own their premises personally while trading through a company. Transferring the property into the trading company is one option, but it can expose the property to the trading company’s creditors. A common alternative is to keep the property personally, or in a separate property company, and grant the trading company a formal lease at a market rent. That can make a future sale of the business simpler, because the buyer can take a lease rather than having to buy the property too. Your accountant should check how each option affects Capital Gains Tax reliefs on a later sale.
Is it worth it?
Moving existing property is usually only worthwhile where the long-term tax savings clearly outweigh the upfront LBTT, Additional Dwelling Supplement and Capital Gains Tax. That tends to mean higher or additional rate taxpayers with significant borrowing, who plan to reinvest profits and hold for the long term. For many landlords the more efficient approach is to keep existing properties personally and buy future properties through a company from the outset. Our guide to choosing a business structure in Scotland covers the wider decision.
Frequently asked questions
Can I gift my property to my limited company to avoid LBTT?
No. Where you are connected with the company, LBTT is normally charged on the market value even if the company pays nothing, and the Additional Dwelling Supplement still applies to residential property.
Does a company always pay the Additional Dwelling Supplement?
Almost always, where it buys a dwelling worth £40,000 or more. Unlike individuals, companies cannot rely on replacing a main residence, so the supplement applies even to a first purchase.
Can I transfer several properties at once?
Yes, but transferring several properties together can change the LBTT calculation, and reliefs for multiple dwellings have their own conditions. Your solicitor and tax adviser should look at the portfolio as a whole.
What happens to my tenants?
Their tenancies continue with the company as the new landlord. You must tell them about the change, the company must be registered as a landlord with the council, and deposit protection details should be updated.
How long does a transfer take?
Usually a few weeks once tax advice is settled and the company’s lender is ready. Lender timescales are often the main factor.
Thinking about moving property into a company?
Our solicitors handle the company set-up, the transfer, the lender’s security and the LBTT return, and work alongside your tax adviser so the paperwork matches the plan. Call 0141 471 9166 or book a free consultation.
Related services and guides
This guide reflects Scottish and UK tax rules as at October 2026. It is general information rather than tax or legal advice, and a transfer should never go ahead without advice from a qualified tax adviser on your own figures.