SPV vs Personal Ownership for Commercial Property
Written by Scott Jones, founder of CommercialPropertyKiln · Last updated
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Should you hold commercial property in your own name or in a limited company (an SPV)? The right answer depends on your income, gearing and plans, but here are the trade-offs.
Personal ownership
Simple and cheap to run. Rental profit is taxed at income-tax rates (rising to 22%, 42% and 47% from April 2027, see income tax and the 2027 rise), and gains at 18% or 24%. Loan interest is fully deductible for commercial property. Good for lower-value holdings and where you want to keep things simple.
Company (SPV) ownership
Rental profit and gains are taxed to corporation tax at 19% to 25%. Interest is fully deductible. Profit retained in the company to reinvest is efficient, but profit drawn out is taxed again as salary or dividends. Better for portfolio landlords rolling up income, and for succession planning.
The switching cost
Moving property you already own personally into a company is a sale for tax: it can trigger SDLT on the market value and CGT on any gain. That cost often outweighs the benefit for a single property, so the structure decision is easiest to get right at the point of purchase.
Pensions and other structures
For the right landlord, holding commercial property in a SIPP or SSAS can be very tax-efficient: see SIPP commercial property. For succession or joint ownership, trusts and partnerships come in, and overseas owners have their own rules under the non-resident landlord regime.
Don't forget the exit
Whatever the structure, plan for the tax on the way out: capital gains tax on a sale and inheritance tax on death. This is a decision to take with an accountant, modelling your own numbers.
Is it better to hold commercial property personally or in a company?
Personal is simpler and cheaper; a company suits portfolio landlords rolling up income, taxed at corporation tax. Both allow full interest relief on commercial property.
What does it cost to move property into a company?
Moving property you already own into a company is a sale for tax, so it can trigger SDLT and CGT, which often outweighs the benefit for a single property.