First-Time UK Landlord via Limited Company — The Practical Guide

Should a first-time landlord use a limited company?

For most higher-rate-taxpayer first-time landlords in 2025/26, the answer is yes — go Ltd from day one. The reason: setting up the SPV at the start is much cheaper than transferring properties later (which triggers CGT and SDLT all over again).

The exception is basic-rate taxpayers with no plans to scale beyond a single property. The SPV adds complexity (annual accounts, corporation tax filings, confirmation statements) that may not pay back if you're only buying one. Read the SPV vs personal-name comparison for the worked example.

Step 1: Set up the SPV

1. Pick a name. Companies House requires unique names; check availability at gov.uk. Common patterns: "[Your surname] Property Holdings Ltd", "[Property location] Investments Ltd".
2. Decide on directors and shareholders. Usually you, optionally your spouse. Co-investors complicate the mortgage application — most lenders prefer one or two directors.
3. Choose the right SIC code. For property investment, use SIC 68209 ("Other letting and operating of own or leased real estate") or SIC 68100 ("Buying and selling of own real estate"). Do not use trading codes like 70229 — lenders will reject the application.
4. Incorporate. File at Companies House online — £50 fee, typically 24 hours to process.
5. Open a business bank account. Tide, Mettle (NatWest), Starling and Monzo Business all do free SPV accounts. Some lenders require the SPV to bank with a specific institution — check before opening.
6. Appoint an accountant. The SPV needs to file annual accounts and corporation tax. A landlord-specialist accountant costs ~£22-£200/month — GoLandlord matches you with one.

Total setup: ~£300-£500 all-in (£50 incorporation + ~£250-£450 accountant setup), one-off.

Step 2: Sourcing the deposit

SPV mortgages require the deposit to come from the SPV's own funds. You move money into the SPV via a director's loan. Steps:

1. Transfer the deposit amount from your personal account to the SPV's business bank account.
2. Record the transfer as a director's loan on the SPV's books. Your accountant will set this up.
3. The SPV repays you the director's loan over time (or you can leave it on the books indefinitely — it's a debt the SPV owes you).
4. Keep clean records — lenders want 3-6 months of bank statements showing the deposit's origin in your personal account.

Common pitfalls:

• Mixing personal and SPV funds in the same account — lenders flag this as a red flag for money-laundering checks.
• Using a "gift deposit" without proper gift letter — gifts to your SPV need documentation just like personal gift deposits.
• Deposit funds appearing in the SPV account less than 3 months before application — some lenders require 3 months' "seasoning".

Step 3: Finding an SPV mortgage

Most SPV BTL lenders only accept applications via specialist brokers — going direct gets you a very limited panel. The broker process:

1. Initial fact-find. Broker collects: SPV details, director income, deposit source, target property type/area/budget, existing portfolio (if any).
2. Decision in Principle (DIP). Broker submits to one or two specialist lenders for a soft credit check and indicative offer. ~48 hours.
3. Property identified. Once you've offered on a property and had the offer accepted, the broker submits the full application to the best-fit lender.
4. Valuation + underwriting. Lender instructs a valuation (you pay for this, ~£250-£600 depending on property value). Underwriter reviews docs.
5. Formal offer. Usually within 2-4 weeks of full application.
6. Conveyancing + completion. Solicitor handles the legal transfer. Typically 6-12 weeks from offer accepted to completion.

Documents the broker will need from you:

• SPV incorporation certificate + Confirmation Statement (most recent)
• SPV bank statements (3-6 months)
• Personal bank statements (3-6 months)
• Director(s) ID + proof of address
• Director(s) income — last 3 months payslips or 2 years' SA302s if self-employed
• Existing portfolio schedule (if relevant)

Step 4: Purchase process

Once the mortgage offer is in, the legal process is similar to a standard purchase with a few SPV-specific extras:

• Solicitor: Pick one experienced with SPV BTL conveyancing. Some panels require specific solicitors. Costs are typically £900-£1,500 for the SPV side plus £300-£600 for the lender's side.
• SDLT: Calculate before exchange. Standard SDLT bands + 5% additional-property surcharge on the full purchase price. HMRC calculator here. For a £250k property the SDLT is typically £15,000 — set this aside in addition to the deposit.
• Insurance: Buildings insurance must be in place from completion. Landlord-specific cover (Tradedirect, Total, Direct Line For Business) — usually £200-£500/year on a single property.
• Gas / electrical certs: Required from completion if the property is to be let. Gas Safe certificate £80-£150, EICR (electrical) £150-£300. Both must be in place before tenants move in.

Step 5: Year-1 compliance

Your SPV is a Ltd company, so it has Companies House and HMRC obligations from day one:

1. Confirmation Statement — annual filing at Companies House, £13. Confirms directors, shareholders, registered office.
2. Annual Accounts — first set due 21 months after incorporation. After that, 9 months after each year-end. Your accountant handles this.
3. Corporation Tax return (CT600) — due 12 months after year-end, payment due 9 months after. Filed by your accountant.
4. Self-Assessment — you personally need to declare any dividends taken from the SPV plus the director's loan balance if outstanding above £10k.

A landlord-specialist accountant on a monthly retainer (~£22-£100/month) handles all of this. Worth every penny — getting any of these wrong can trigger HMRC fines or block future mortgage applications.