Specialist buy-to-let broker Commercial Trust Limited is urging buy-to-let landlords to tread with caution and seek appropriate advice before jumping into incorporating their property business into a limited company.

The reduction in mortgage interest tax relief and the introduction of stamp duty are two relatively recent initiatives that have resulted in some landlords reassessing their property businesses and deciding to incorporate.

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 Limited, sounded a cautionary note.

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

“Upon 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.

“Having done so, we would be delighted to help any landlords that then want to consider investing in buy-to-let as a limited company. There are a wide range of lenders and products that are available and based on individual circumstances.

“But the message should be clear to landlords thinking of taking the limited company option, to investigate fully first.”