Buy to let through a company

With the restriction of the relief for interest paid on a buy to let property to basic rate only where owned by unincorporated entities it might be worth considering acquiring such properties through a company but at the time of first purchase. Transfer of a property already owned could give rise to capital gains tax and stamp land tax duty charges.

A company will pay 20% corporation tax on any profits. Any capital gain will also be taxed at 20% with an allowance for inflation (indexation allowance) added to the base cost; something which an individual cannot claim.
Possible downsides are the cost of extracting the subsequent profit out of the company and the lack of an annual capital gains tax exemption in a company.

On the other hand up to £5,000 of dividends can be paid without any additional tax charge if this is the only source of dividend income and salaries can be paid to family members to create a qualifying year for state pension purposes.

It is worth setting out the plans you have regarding the property and then comparing the options to see which is better.