Can I Sell My House to My Limited Company?

Selling a personal property to a limited company you own is a complex but feasible process in the UK, involving numerous legal, financial, and practical considerations. This comprehensive guide will cover the legal framework, tax implications, benefits, risks, and the step-by-step process of selling your house to your limited company.


Selling a house to a limited company is a strategy employed for various reasons, including tax planning, asset protection, and business expansion. However, it is crucial to understand the implications and steps involved to ensure compliance with UK laws and regulations.

Legal Framework

1. Ownership and Corporate Structure

Before proceeding, it is essential to understand the ownership structure of the limited company:

  • Shareholder Control: Ensure you have control over the company as a majority shareholder or director.
  • Company Articles: Review the company’s Articles of Association to confirm it can legally hold residential property.

2. Legal Requirements

Several legal steps must be taken when transferring property ownership to a company:

  • Conveyancing Process: Similar to a regular property sale, the conveyancing process involves transferring the legal title of the property from an individual to the company.
  • Property Valuation: A professional valuation must be conducted to determine the property’s fair market value, which will affect tax calculations.
  • Contracts: A formal sale agreement must be drafted and signed, outlining the terms and conditions of the sale.

Tax Implications

1. Stamp Duty Land Tax (SDLT)

The purchase of a residential property by a company is subject to Stamp Duty Land Tax, which can be higher than the rates for individual buyers:

  • Standard Rates: For properties over £125,000, companies must pay SDLT at standard residential rates, plus an additional 3% surcharge for second properties.
  • Higher Rates for Enveloped Dwellings (HRED): Properties worth over £500,000 may attract a higher rate of 15% SDLT.

2. Capital Gains Tax (CGT)

When you sell a property to your company, Capital Gains Tax (CGT) may be applicable on any profit made from the sale:

  • Calculation: CGT is calculated based on the difference between the property’s purchase price (or its value when you acquired it) and the sale price to the company.
  • Rates: The applicable rates depend on your income tax band, with higher rates for higher earners.

3. Corporation Tax

The limited company will be subject to Corporation Tax on any rental income generated from the property:

  • Current Rate: Corporation Tax is currently charged at 19% of the company’s profits.

4. Income Tax

If the company pays you a salary or dividends, this income will be subject to personal Income Tax:

  • Dividends: Taxed at different rates depending on your income tax band.
  • Salary: Subject to PAYE and National Insurance contributions.

5. Inheritance Tax (IHT)

Transferring property to a limited company can also have implications for Inheritance Tax planning:

  • Business Property Relief: In certain circumstances, business property may qualify for relief from Inheritance Tax, potentially reducing the IHT liability.


1. Tax Efficiency

  • Offsetting Expenses: Companies can offset expenses related to the property, such as mortgage interest, repairs, and maintenance, against rental income.
  • Reduced Tax Rates: Corporation Tax rates are generally lower than higher-rate Income Tax rates, potentially resulting in tax savings.

2. Asset Protection

  • Limited Liability: Holding property through a company can protect personal assets from business liabilities.
  • Estate Planning: Using a company structure can facilitate more efficient estate planning and potentially reduce IHT liability.

3. Business Expansion

  • Portfolio Management: Holding properties within a company can simplify portfolio management and financing, making it easier to expand your property business.

Risks and Considerations

1. Higher Initial Costs

  • SDLT and Professional Fees: Higher SDLT rates and professional fees for conveyancing, valuation, and legal advice can increase initial costs.
  • Capital Gains Tax: Immediate CGT liability on transferring the property to the company.

2. Ongoing Compliance

  • Corporation Tax Returns: The company must file annual Corporation Tax returns and comply with other HMRC requirements.
  • Directors’ Responsibilities: As a director, you have legal responsibilities and must ensure the company complies with relevant laws and regulations.

3. Reduced Flexibility

  • Dividends and Salaries: Extracting money from the company as dividends or salary can have tax implications and reduce flexibility in accessing funds.
  • Property Use: Restrictions on how the property can be used if held within a company structure.

Step-by-Step Process

1. Professional Advice

Before proceeding, seek advice from professionals:

  • Tax Advisor: To understand the tax implications and plan accordingly.
  • Solicitor: To handle the legal aspects of the transfer.
  • Accountant: To manage the company’s financial records and compliance.

2. Property Valuation

  • Hire a Valuer: Engage a professional valuer to determine the fair market value of the property.
  • Obtain a Report: Obtain a detailed valuation report, which will be required for tax calculations.

3. Arrange Financing

  • Company Mortgage: If the company needs to finance the purchase, arrange a mortgage with a lender that offers commercial property loans.
  • Personal Loan: Alternatively, you can lend money to the company to finance the purchase.

4. Draft Sale Agreement

  • Legal Documentation: Engage a solicitor to draft the sale agreement, ensuring all terms and conditions are clearly outlined.
  • Review and Sign: Review the agreement carefully and sign it.

5. Conveyancing

  • Hire a Conveyancer: Hire a conveyancer to handle the property transfer process.
  • Transfer Title: The conveyancer will manage the title transfer and register the property in the company’s name with HM Land Registry.

6. Pay Stamp Duty

  • Calculate SDLT: Calculate the SDLT based on the property value and pay it to HMRC within 14 days of the transaction.
  • File Return: File an SDLT return with HMRC, even if no SDLT is payable.

7. Report and Pay Capital Gains Tax

  • Calculate CGT: Calculate any CGT due on the transfer based on the property’s sale price and your purchase price.
  • Report to HMRC: Report the gain and pay the tax within the relevant timeframe, typically by the 31st of January following the tax year in which the sale occurred.

8. Update Company Records

  • Financial Statements: Update the company’s financial statements to reflect the new asset.
  • Corporation Tax: Ensure the property income and expenses are recorded correctly for Corporation Tax purposes.

9. Ongoing Management

  • Property Management: Decide whether to manage the property yourself or hire a property management company.
  • Compliance: Ensure ongoing compliance with all legal and tax obligations.

Detailed Financial Considerations

1. SDLT Example Calculation

Assume you are selling a house valued at £600,000 to your limited company. Here’s how the SDLT might be calculated:

  • Standard SDLT Rates (for 2023/24):
    • Up to £125,000: 0%
    • £125,001 to £250,000: 2%
    • £250,001 to £925,000: 5%
  • Additional Property Surcharge: +3% on the entire value


  • Standard SDLT:
    • First £125,000: 0% = £0
    • Next £125,000: 2% = £2,500
    • Remaining £350,000: 5% = £17,500
  • Total Standard SDLT: £2,500 + £17,500 = £20,000
  • Additional 3% Surcharge: £600,000 * 3% = £18,000
  • Total SDLT: £20,000 + £18,000 = £38,000

2. CGT Example Calculation

Assume you purchased the house for £300,000, and you are selling it to your company for £600,000. The gain is £300,000.

  • CGT Allowance: £12,300 (for 2023/24)
  • Taxable Gain: £300,000 – £12,300 = £287,700

CGT Rates (for higher-rate taxpayers):

  • 28% on residential property gains


  • CGT Payable: £287,700 * 28% = £80,556

Case Studies

Case Study 1: Tax Efficiency

Mr. Harris owns a rental property that generates significant rental income. By transferring the property to his limited company, he can offset the mortgage interest and other expenses against the rental income, reducing the taxable profit and overall tax liability.


  • Reduced Income Tax liability
  • Enhanced tax efficiency for rental income

Case Study 2: Estate Planning

Mrs. Jones wants to ensure her property portfolio is managed efficiently after her death. By transferring her properties to a limited company, she can maintain control and simplify the transfer of ownership to her heirs, potentially reducing Inheritance Tax liability through Business Property Relief.


  • Improved estate planning
  • Potential IHT savings

Case Study 3: Asset Protection

Mr. and Mrs. Smith own a business and want to protect their personal assets. By transferring their personal property to a limited company, they can safeguard it against business liabilities, ensuring it remains protected if the business faces financial difficulties.


  • Enhanced asset protection
  • Separation of personal and business assets

Potential Pitfalls and How to Avoid Them

1. Overlooking Professional Advice

  • Solution: Engage experienced solicitors, accountants, and tax advisors to navigate the complexities of property transfer and tax implications.

2. Ignoring SDLT and CGT

  • Solution: Calculate and plan for SDLT and CGT liabilities before proceeding with the transfer to avoid financial surprises.

3. Mismanaging Company Records

  • Solution: Maintain accurate financial records and ensure timely compliance with all tax filing requirements to avoid penalties and interest.

4. Misunderstanding Inheritance Tax Implications

  • Solution: Consult with an estate planning expert to understand the potential IHT implications and plan accordingly.

5. Overestimating Tax Savings

  • Solution: Perform a detailed financial analysis to assess the actual tax savings and ensure they justify the costs and complexities involved in the transfer.


Selling your house to your limited company in the UK can offer several benefits, including tax efficiency, asset protection, and business expansion opportunities. However, it involves navigating a complex landscape of legal and tax considerations. By understanding the implications, seeking professional advice, and carefully planning each step, you can make informed decisions that align with your financial and business goals.

Comprehensive Checklist

  1. Seek Professional Advice:
    • Consult with a tax advisor, solicitor, and accountant.
  2. Property Valuation:
    • Obtain a professional valuation report.
  3. Arrange Financing:
    • Secure a company mortgage or personal loan to the company.
  4. Draft Sale Agreement:
    • Have a solicitor draft and review the sale agreement.
  5. Conveyancing:
    • Hire a conveyancer to handle the title transfer.
  6. Pay Stamp Duty:
    • Calculate and pay SDLT, and file the return with HMRC.
  7. Report CGT:
    • Calculate and report any CGT to HMRC.
  8. Update Company Records:
    • Update financial statements and ensure Corporation Tax compliance.
  9. Ongoing Management:
    • Decide on property management and ensure ongoing legal and tax compliance.

By following this comprehensive guide and checklist, you can successfully navigate the process of selling your house to your limited company in the UK, ensuring a smooth and beneficial transition.

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