Since Section 24 removed full mortgage interest tax relief for individual landlords, purchasing buy-to-let property through a limited company has become the default strategy for new portfolio investors. But the mechanics are more nuanced than simply forming a company and buying a house.\n\nWhat Is an SPV — A Special Purpose Vehicle is a limited company formed specifically to hold property. Its SIC codes (Standard Industrial Classification) should be 68100 (buying and selling of own real estate) and 68209 (other letting and operating of own or leased real estate). Many BTL lenders only lend to SPVs with these specific SIC codes and no other trading activity. The company should be registered at Companies House with at least one director who is a UK resident for tax purposes.\n\nFormation Practicalities — Register at Companies House (12 pounds online). Choose a company name that reflects property activity. Appoint directors (you and optionally a spouse or business partner). Issue shares (100 ordinary shares at 1 pound each is standard). Apply for a business bank account — Tide, Starling Business, and Mettle are popular for SPVs as they accept property companies. Apply for corporation tax registration with HMRC. Total setup cost: under 100 pounds if you do it yourself, or 200 to 500 pounds through an accountant.\n\nTax Advantages — Corporation tax at 25% on profits versus income tax at 40% or 45% for higher-rate personal taxpayers. Full mortgage interest deduction against rental profits (Section 24 does not apply to companies). Retained profits can be reinvested without personal tax until you extract them. National Insurance is not payable on rental profits within the company.\n\nExtracting Profits — Director salary: up to the personal allowance (currently 12,570 pounds) is tax-free and NI-free if it is your only income. Dividends: taxed at 8.75% (basic rate), 33.75% (higher rate), or 39.35% (additional rate) after the 500 pound tax-free dividend allowance. The most tax-efficient extraction strategy depends on your other income sources. Many SPV landlords leave profits in the company and reinvest, only extracting what they need personally.\n\nLender Criteria for SPVs — Not all BTL lenders lend to limited companies, and those that do often have specific requirements. The company must be an SPV (not a trading company). Directors must provide personal guarantees. Most lenders require the SPV to have the correct SIC codes. Some lenders restrict lending to companies less than 6 months old. Rates are typically 0.25% to 0.75% higher than personal BTL rates. Key lenders: The Mortgage Works (Nationwide's BTL arm, accepts new SPVs), Paragon, Fleet Mortgages, Kent Reliance, Foundation Home Loans, Landbay, Aldermore, and BM Solutions.\n\nAccounting and Compliance — A company must file annual accounts with Companies House and a corporation tax return with HMRC. Annual accounts preparation costs 300 to 800 pounds through an accountant. You must maintain a confirmation statement (annual return) at Companies House (13 pounds per year). Keep company finances completely separate from personal finances. Every property transaction, rental payment, and expense must flow through the company bank account.\n\nCommon Mistakes — Using a company that has other trading activity (many lenders reject this). Failing to register for corporation tax promptly. Mixing personal and company funds. Not having the correct SIC codes. Trying to transfer existing personally-held properties into the company without understanding the stamp duty and CGT implications. Using a company when you are a basic-rate taxpayer with one or two properties (the administrative burden may outweigh the tax saving).