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D1
Keep vs Sell vs Incorporate
Section 24 has changed the maths for higher-rate landlords. Compare the three main exits or restructures with worked numbers.
Compare your options
Keep in personal name
Pros
- No CGT or SDLT trigger now
- Simple admin
- Mortgages widely available
Cons
- Section 24 caps relief at 20%
- Higher-rate tax on gross rent
- MTD admin from April 2026
Best for: Basic-rate taxpayers with low LTV and small portfolios.
Sell
Pros
- Releases capital
- Removes management hassle
- May avoid future CGT rises
Cons
- CGT now (28% top rate on residential gains in some bands)
- Lose future rental income
- Selling costs
Best for: Properties with thin yields, high CGT base, or that need major capex.
Incorporate
Pros
- Full mortgage interest relief
- 19–25% corp tax not 40/45%
- Profits can be retained for growth
Cons
- SDLT and CGT on transfer (incorporation relief may apply)
- Higher mortgage rates
- More admin
Best for: Higher/additional-rate landlords with 4+ properties and long-term hold horizon.
Worked scenarios
1 property, basic-rate taxpayer, 60% LTV
| Option | Outcome |
|---|---|
| Keep | Usually best — Section 24 has limited impact at 20% bracket. |
| Sell | Only if yield is poor or capital is needed elsewhere. |
| Incorporate | Rarely worth the SDLT/CGT trigger for a single property. |
5 properties, higher-rate taxpayer, 75% LTV
| Option | Outcome |
|---|---|
| Keep | Section 24 erodes 30–50% of net profit; cashflow can go negative. |
| Sell | Consider partial sell-down to deleverage. |
| Incorporate | Often the best route — model SDLT/CGT carefully with an accountant. |
10+ properties, additional-rate, mixed LTV
| Option | Outcome |
|---|---|
| Keep | Section 24 + 45% income tax = severely impaired returns. |
| Sell | Usually used to fund deleveraging, not a full exit. |
| Incorporate | Almost always modelled — incorporation relief often available for genuine businesses. |
Decision checklist
- Get last 2 years' tax returns and current portfolio P&L per property.
- Run the Section 24 calculator to see the cash impact.
- Run the incorporation calculator with realistic mortgage costs.
- Get an SDLT estimate for transfer to the company.
- Check whether incorporation relief is likely available (HMRC TCGA s162).
- Get a written quote from an accountant before committing.
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