UK SPV Tax: 2026/27 Corporation Tax, SDLT and ATED Guide

Updated for 2026/27. A company SPV is normally taxed like any other UK company. It pays Corporation Tax on property, trading and financing profits and chargeable gains, while shareholders can pay further tax when value is extracted. The “SPV” label creates no automatic tax exemption.

Corporation Tax rates

• 19% small-profits rate: profits of £50,000 or less
• Marginal relief: profits between £50,000 and £250,000
• 25% main rate: profits above £250,000

These thresholds assume a 12-month period and no associated companies. They are reduced for short periods and divided by the number of associated companies plus the company itself. Multiple SPVs under common control can therefore reach the 25% regime sooner.

Property rental profits

A property SPV deducts allowable revenue costs such as agent fees, insurance, repairs and qualifying finance costs. Unlike an individual residential landlord, a company generally deducts qualifying loan interest under the corporate loan-relationship rules rather than receiving only a basic-rate tax credit. Purpose, connected lending and restriction rules still matter.

Property acquisitions and SDLT

A company buying residential property in England or Northern Ireland generally pays the higher residential rates. Certain corporate purchases over £500,000 can face a 17% flat SDLT rate unless a relief applies, including qualifying property-rental or development businesses. Non-resident transactions can add a 2% surcharge. Scotland and Wales use LBTT and LTT instead.

ATED

Annual Tax on Enveloped Dwellings can apply when a company or other non-natural person holds UK residential property valued above £500,000. Relief may eliminate the charge for genuine commercial letting, development or trading, but a relief declaration return can still be required. Filing is generally annual and acquisitions can trigger shorter deadlines.

VAT

Residential rent is normally exempt from VAT, limiting recovery. Commercial property can be exempt or subject to an option to tax. Development, construction, transfer-of-going-concern and domestic reverse-charge rules can affect acquisitions and sales. VAT registration follows taxable turnover and supply classification.

Interest and shareholder loans

Document lender, amount, term, interest and repayment. A company may deduct interest under loan-relationship rules where conditions are met, but transfer pricing, unallowable purpose, corporate interest restriction and withholding tax can restrict or complicate the result. Interest paid to an individual shareholder is taxable on that person and may require CT61 reporting and withholding.

Dividends and salary

Dividends are paid from distributable post-tax profits and are not deductible for Corporation Tax. Individual shareholders pay dividend tax after the dividend allowance. Salary and employer pension contributions can be deductible where incurred wholly and exclusively, but PAYE, employer National Insurance and benefit rules apply.

Directors’ loans

Personal withdrawals not treated as salary, dividend or expense reimbursement can create an overdrawn director’s loan. A close company can face a temporary section 455 Corporation Tax charge when the loan remains outstanding after the statutory period, and beneficial-loan or write-off rules may apply.

Chargeable gains

A company pays Corporation Tax on chargeable gains when disposing of property, shares or other assets. Companies do not receive an individual’s Capital Gains Tax annual exempt amount. Indexation is frozen at December 2017 for eligible older assets. Selling shares in the SPV produces a different tax result from the SPV selling its asset.

Losses

Property, trading, loan-relationship and capital losses follow different rules and cannot always be freely offset. Group relief may be possible in qualifying groups, while anti-avoidance provisions restrict arrangements without commercial substance. Preserve evidence by loss type and period.

Associated companies

Companies are associated where one controls the other or both are under common control, subject to detailed rules. Dormant companies may sometimes be excluded, but active property SPVs commonly count. With four associated companies in total, the £50,000 and £250,000 thresholds are divided by four.

Example

A property SPV earns £70,000 taxable profit and has one associated company. Its adjusted lower and upper thresholds are £25,000 and £125,000, so marginal relief—not the 19% small-profits rate—applies. The exact calculation also considers augmented profits and period length.

Transferring existing property into an SPV

A transfer from an individual to their company is normally a market-value disposal for Capital Gains Tax and an acquisition for SDLT/LBTT/LTT. Mortgage refinancing, lender consent and legal fees also arise. Incorporation relief may apply to a genuine business transferred with statutory conditions, but a passive property portfolio does not automatically qualify.

Inheritance Tax

Shares in a property investment SPV are normally investment assets and often do not qualify for Business Relief. Development or trading businesses require a fact-specific assessment. Lifetime gifts can create Capital Gains Tax and estate-planning consequences.

Tax compliance calendar

• Register for Corporation Tax within three months after starting business activity
• Pay Corporation Tax normally nine months and one day after the period end
• File CT600 within 12 months after the period end
• File Companies House accounts normally within nine months
• Review VAT, PAYE and ATED deadlines separately
• Issue dividend paperwork and maintain loan records

Tax planning questions

1. Will associated SPVs reduce the Corporation Tax thresholds?
2. What acquisition tax and refinancing cost applies?
3. Can interest be deducted, and is withholding required?
4. Will ATED relief and filing apply?
5. How will investors extract profit?
6. Is the exit an asset sale or share sale?
7. Does the structure have a genuine commercial purpose?

Use HMRC’s official Corporation Tax rates, corporate SDLT guidance and ATED guidance. Our property SPV guide covers commercial structuring.

Frequently asked questions

Does an SPV pay only 19% tax?

Not always. Marginal relief, the 25% rate and associated-company thresholds can apply.

Can a company deduct mortgage interest?

Qualifying interest is generally considered under corporate loan-relationship rules, subject to restrictions.

Is transferring my property tax-free?

No. Market-value CGT, SDLT or devolved taxes and refinancing costs can arise, with relief only where conditions are met.

This guide is general information. Property transfers and connected finance need advice before contracts are signed.