Setting Up a Property Limited Company

Important Legal Note

Directors of a limited company have statutory duties under the Companies Act 2006 including the duty to act within powers, promote the success of the company, and avoid conflicts of interest. Breach of these duties can result in personal liability.

Document Overview

A Special Purpose Vehicle (SPV) limited company is the standard structure for portfolio landlords buying new properties. This guide covers everything from incorporation to ongoing compliance.

Company Structure:

SPV: a company set up solely to hold and manage property
SIC code 68209: other letting and operating of own or leased real estate
Consider share classes: ordinary shares for income; preference shares for capital
Appoint a company secretary (optional but recommended for larger portfolios)

Mortgage Considerations:

Most buy-to-let lenders now offer limited company mortgages
Directors are typically required to provide personal guarantees
Lenders assess the company's rental income and the directors' personal income
Stress-testing: rental income must typically cover 125–145% of the mortgage payment

Accounting Obligations:

Annual accounts filed at Companies House within 9 months of year end
Corporation tax return (CT600) filed within 12 months of year end
Corporation tax paid within 9 months and 1 day of year end
Making Tax Digital for corporation tax: planned from April 2026
Confirmation statement filed annually (£34 online)

Ongoing Compliance Calendar:

Month 1: register for corporation tax with HMRC
Month 3: open business bank account and set up bookkeeping
Annually: file accounts, CT600, confirmation statement
Quarterly: review rental income, expenses and director's loan account