Limited Company (SPV) buy
Limited Company (SPV) buy-to-let mortgages allow landlords to deduct 100% of mortgage interest as a business expense—a major advantage since Section 24 removed this relief for personal landlords.
Limited Company (SPV) buy-to-let mortgages allow landlords to deduct 100% of mortgage interest as a business expense—a major advantage since Section 24 removed this relief for personal landlords.
Introduced in the UK between 2017 and 2020, Section 24 of the Finance (No. 2) Act 2015 fundamentally changed how individual landlords are taxed. It restricted mortgage interest tax relief to the basic rate (20%), meaning higher and additional-rate taxpayers could no longer offset the full cost of their mortgage interest against their rental income. For many heavily leveraged private landlords, this resulted in tax bills that exceeded their actual cash profits.
Conversely, investing through a Special Purpose Vehicle (SPV) limited company mitigates this issue entirely. Because a limited company pays Corporation Tax on its profits (currently ranging from 19% to 25%), mortgage interest is still classed as a legitimate, 100% deductible business expense. Furthermore, landlords can retain profits within the company to reinvest in further properties without triggering personal income tax. This makes the SPV route the preferred structure for professional portfolio building in the current UK tax climate.