A specialist buy to let broker is urging landlords to tread with caution before jumping feet first into incorporating their property business into a limited company.

There’s been a surge in incorporations since the start of the phased reduction in landlords’ mortgage interest tax relief – forming a limited company is considered one way for buy to let investors to avoid this restriction. 

With lenders predicting there will continue to be a growing trend towards limited company buy to let activity this year, Andrew Turner, chief executive at Commercial Trust, is sounding a cautionary note.

“Whilst it’s understandable that buy to let landlords want to avoid paying more tax than is necessary, it’s essential – as with any investment – that they fully investigate how their personal circumstances apply to buy to let taxation.

“On face value, many landlords are perhaps seeing the headlines and are considering incorporating their property investments, as limited companies are taxed differently to individuals. 

“However, taxation is a complex issue and I would urge anyone considering this move, to seek advice from a tax specialist first, to ensure that their buy to let venture would actually be better off tax-wise, in a limited company.”