By the Unity Stays directors, Marcus Chong & Gadir Al-Khatib · Last updated 12 August 2026
In short: It depends on your tax rate, borrowing and plans. Since the furnished holiday lettings regime ended in April 2025, personally held short lets face the finance-cost restriction while companies still deduct interest, so a company suits higher-rate borrowers accumulating profits. Extraction is taxed again, company borrowing costs more, and moving an existing property can trigger capital gains and stamp duty.
What changed in April 2025
Furnished holiday lettings were outside the finance-cost restriction that applies to ordinary property income. FHL properties could deduct mortgage interest in full, which was one of the genuine advantages of short letting held personally.
The FHL regime was abolished from April 2025. Personally held short lets now sit within the same restriction as any other property income: finance costs attract a basic-rate reduction rather than being deductible.
That removed a standing argument for personal ownership and is why the structure question became live for short-let investors specifically, rather than only for buy-to-let landlords who have been having it since 2017.
The case for a company
Companies deduct finance costs in the normal way, so the restriction does not bite. For a higher-rate taxpayer with borrowing, that difference alone can be substantial.
Profits are taxed at corporation tax rates rather than at your marginal rate, and retained profits can be reinvested without a further personal charge until they are drawn. For someone building a portfolio rather than taking income, that compounding matters.
It also makes ownership divisible and transferable in ways individual ownership is not, which is relevant for partners, family or eventual succession.
The case against, and what it actually costs
Taking money out is a second tax event. Salary and dividends are taxed personally, so a company suits accumulation better than income.
Company mortgages are typically priced above personal equivalents and the lender pool is smaller — which stacks with the already narrower pool for holiday-let lending.
And there is the running cost: accounts, corporation tax returns, a confirmation statement, and an accountant who charges more than for a self-assessment. Real money every year, on every entity.
Why moving an existing property is the expensive part
This is the point most often skipped. Transferring a property you already own into a company is a disposal at market value and an acquisition, not an internal reshuffle.
That can trigger capital gains tax on the disposal and stamp duty land tax on the acquisition, including any additional-property surcharge. Refinancing costs come on top, and the existing lender has to agree.
The combined charge can take many years of tax saving to recover. Incorporating a portfolio you are still buying is a very different decision from incorporating one you already hold, and conflating the two is the most common error here.
The questions to take to an accountant
Not "should I incorporate", which cannot be answered generally, but these:
- What is my marginal rate now, and what will it be if property income is taxed before finance costs?
- Am I accumulating or drawing? A company suits the first far better than the second.
- What would the CGT and SDLT charge be on moving what I already hold?
- What does company borrowing cost me against personal, on the actual products available?
- What are the annual compliance costs across the number of entities I would end up with?
- How does this interact with what I intend to do in five years — sell, hold, pass on?
This sets out the considerations, not a recommendation. Ownership structure is genuinely an accountant's question and depends on your income, plans and existing holdings. Take advice before acting.