SDLT, LTT or LBTT When You Incorporate: England, Wales and Scotland Compared

Quick answer: When your own company takes over your rental properties, a land tax is due on at least their market value. England and Northern Ireland charge Stamp Duty Land Tax (SDLT), Wales charges Land Transaction Tax (LTT) and Scotland charges Land and Buildings Transaction Tax (LBTT). For a company buying residential property, each applies a higher rate or supplement. Incorporation relief for capital gains tax does nothing to reduce it.

Which tax applies, and why it bites

Moving let property into a company you control is, in tax law, a sale to a connected person. Two taxes can arise: capital gains tax (CGT) on your gain, and a land tax paid by the company as buyer. CGT can be deferred by incorporation relief under section 162 of the Taxation of Chargeable Gains Act 1992. The land tax cannot.

The land tax is worked out on the market value of the property, not on what the company pays. If the company takes over a mortgage, the debt can count as part of the price. The tax is usually the biggest cash cost of incorporating, and it is a cost paid on day one by the company, so it needs funding.

Which tax applies depends on where the land is, not where you live or where the company is based.

England and Northern Ireland: SDLT

For a company buying residential property, the standard bands carry a 5 percentage point surcharge from 31 October 2024. For 2026/27 the rates are:

If a company buys a single dwelling worth more than £500,000, a flat 17% of the whole price applies instead. Relief from the 17% rate is available where the dwelling is bought for a qualifying purpose, including a property rental business. Where the relief applies, the company pays the bands in the table instead. The relief can be withdrawn if the conditions stop being met within three years, for example if someone connected with you lives there.

Other points:

• Linked purchases. Several dwellings bought in the same transaction are generally linked. The rate is worked out on the total value and then apportioned.
• Multiple dwellings relief was abolished for transactions on or after 1 June 2024.
• Six or more dwellings bought in one transaction can still be treated as non-residential, with lower rates. This must be checked against the exact facts.
• Timing. The SDLT return and payment are due within 14 days of completion.

Wales: LTT

In Wales, a company buying a residential property pays the higher residential rates of LTT. From 11 December 2024 these are: 5% up to £180,000, 8.5% to £250,000, 10% to £400,000, 12.5% to £750,000, 15% to £1.5m and 17% above that.

Wales also has its own reliefs and its own rules on transfers involving partnerships and connected companies. They are not identical to the English rules, so an SDLT plan cannot be copied across.

Scotland: LBTT

In Scotland, a company buying residential property generally pays the Additional Dwelling Supplement (ADS) on top of the main LBTT rates, even if it owns no other property. The supplement is 8% of the price from 5 December 2024.

The ADS has its own reliefs and exemptions, and the rules for transfers to connected companies and partnerships are separate from the English ones. Scottish landlords should take advice early.

Example: A landlord moves a flat worth £400,000 into a company. In England, SDLT at company rates is £30,000 (£6,250 + £8,750 + £15,000). In Wales, LTT at higher residential rates is £29,950 (£9,000 on the first £180,000, £5,950 on the next £70,000 and £15,000 on the last £150,000). In Scotland, the Additional Dwelling Supplement alone is £32,000 (8% of £400,000), before the main LBTT. The figures are for illustration, and the three are not like for like, because the rules differ. Hypothetical.

What does not change across the UK

• CGT. Capital gains tax applies across the UK on the same rates: 18% or 24% in 2026/27, after a £3,000 annual exempt amount for individuals. Section 162 applies wherever the property is.
• Corporation tax. The company pays UK corporation tax on its profits whichever nation the property is in.
• ATED. The Annual Tax on Enveloped Dwellings applies to UK residential property worth over £500,000 held by a company, with a relief for properties let commercially to third parties. A return must be filed each year to claim it.
• The business test. Incorporation relief needs a genuine property rental business. Where you hold property in more than one nation, the test looks at the activity as a whole.

Our article on moving a property portfolio into a limited company and the property portfolio incorporation service page set out the CGT side.

Ways landlords try to cut the bill

• Partnership route. In England, where property is held in a genuine partnership, a transfer out to a connected company can be charged on a reduced basis under Schedule 15 to the Finance Act 2003. It needs a real partnership, not just joint ownership, and HMRC challenges artificial arrangements. See our article on incorporating a jointly owned portfolio.
• LLP and liquidation schemes. HMRC's Spotlight 69 says that putting property into an LLP, liquidating the LLP and selling to your own company does not work. We would not recommend it.
• Buying new in a company. Leaving existing property alone and buying new in a company avoids the transfer, though the purchase itself is taxed at company rates.
• Staged moves. Spreading transfers over several years rarely cuts the land tax, because linked transactions are added together, and it can cost incorporation relief, which needs the business to transfer as a going concern.

Do not try to reduce the value. The land tax is charged on market value between connected parties, and a low valuation invites an enquiry.

What to do before you commit

1. Map the properties by nation and list each value.
2. Calculate the land tax for each under the relevant rules.
3. Add CGT, relief and lender costs to get the full cost of getting in.
4. Compare it with the annual saving from Section 24 and corporation tax, and the cost of taking profit out.
5. Check the date. The Budget on 28 October 2026 may change rates or reliefs, so recheck close to completion.
6. Plan the cash, as the land tax is due soon after completion.

Talk to us about Property Portfolio Incorporation

• Incorporation relief under section 162 can defer CGT, but only if the rental activity is a business
• From 6 April 2026 the relief must be claimed, it is no longer automatic
• SDLT is usually charged on market value, unless a partnership route properly applies

See how we help or book a free 20-minute call.

FAQs

Do I pay stamp duty when I transfer my rental properties to my company?

Yes, normally. Land tax is due on at least market value when a company buys from someone connected with it. In England and Northern Ireland that is SDLT, in Wales LTT and in Scotland LBTT. Incorporation relief for CGT does not reduce it.

What is the SDLT rate for a company buying residential property in 2026/27?

The standard bands plus a 5 percentage point surcharge: 5% up to £125,000, 7% to £250,000, 10% to £925,000, 15% to £1.5m and 17% above. A flat 17% applies to a single dwelling over £500,000, unless a relief for a property rental business is available.

Is there an extra charge for companies in Scotland?

Yes. A company buying residential property in Scotland generally pays the Additional Dwelling Supplement of 8% of the price from 5 December 2024, on top of the main LBTT rates. Reliefs and exemptions exist, so we check each case.

Does Wales have a company surcharge?

Wales applies higher residential LTT rates to companies from 11 December 2024: 5% up to £180,000, 8.5% to £250,000, 10% to £400,000, 12.5% to £750,000, 15% to £1.5m and 17% above that.

When do I have to file and pay?

For SDLT in England and Northern Ireland, within 14 days of completion. Wales and Scotland have their own deadlines and online systems. Your conveyancer normally files the return, but you should confirm who does it before completion, as late filing brings penalties.

Sources

• SDLT residential rates: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
• SDLT and corporate bodies (17% rate and reliefs): https://www.gov.uk/guidance/stamp-duty-land-tax-corporate-bodies
• Higher rates and the 17% single rate from 31 October 2024: https://www.gov.uk/government/publications/stamp-duty-land-tax-increase-to-the-higher-rates-of-stamp-duty-land-tax-and-to-the-single-rate-payable-by-non-natural-persons
• FA 2003 section 53 (connected company, market value): https://www.legislation.gov.uk/ukpga/2003/14/section/53
• FA 2003 section 55 (linked transactions): https://www.legislation.gov.uk/ukpga/2003/14/section/55
• FA 2003 Schedule 4A paragraphs 5 and 5G: https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/5 and https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/5G
• FA 2003 Schedule 15, paragraphs 17A and 21: https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/17A and https://www.legislation.gov.uk/ukpga/2003/14/schedule/15/paragraph/21
• SDLT filing and payment: https://www.gov.uk/stamp-duty-land-tax/how-to-pay
• Abolition of multiple dwellings relief: https://www.gov.uk/government/publications/stamp-duty-land-tax-abolition-of-multiple-dwellings-relief-from-1-june-2024/stamp-duty-land-tax-abolition-of-multiple-dwellings-relief-from-1-june-2024
• Welsh LTT rates: https://www.gov.wales/land-transaction-tax-rates-and-bands
• LBTT Additional Dwelling Supplement: https://revenue.scot/taxes/land-buildings-transaction-tax/additional-dwelling-supplement-ads
• Spotlight 69 (LLP liquidation schemes): https://www.gov.uk/guidance/liquidation-of-a-limited-liability-partnership-used-to-avoid-capital-gains-tax-spotlight-69
• Section 162 TCGA 1992: https://www.legislation.gov.uk/ukpga/1992/12/section/162
• ATED charges and reliefs: https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-the-basics and https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-reliefs-and-exemptions

Next step

If your properties are in more than one nation, we will price the land tax for each and set it against the savings from a company, so you see the real cost of getting in. We offer a free 20-minute call to start. Book a call.