How to survive the great property sell-off

Telegraph

07-05-2025

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It's been almost a decade since I sat in my accountant's office, along with top tax specialists, trying to work out what to do with the introduction of 'Section 24' and my personally owned portfolio.
It was an insanely stressful time to learn everything I'd built was likely about to be taxed into extinction. Section 24 effectively signalled the dramatic scaling back of landlords' tax relief from mortgage interest.
We explored a multitude of options including setting up a company, looking into partnerships, but the bottom line was: it was easier to start selling.
The plan was: sell a few every year, pay down debt and hopefully I'd survive.
Was it the best plan? I don't know. The benefit of hindsight is you could always have taken a different path, but I know for myself now, I'm much happier to own a smaller, more manageable portfolio and still be in business.
Since then, I've bought a couple of other properties, in a company structure, so when a reader emailed me with their question about how best to dispose of a property portfolio held in a company, my interest was piqued.
Our reader asked:
Record numbers of landlords are now incorporating, or buying properties in a limited company structure (as at February this year there are now over 400,000 companies with buy-to-let properties), so this is a pertinent and timely question.
I spoke to Sarah Bowen, a tax director at Thompson Wright, to get her thoughts.
Sarah said there are a couple of ways to sell a limited company.
One route is to go down the agency approach and contact a company who specialises in business sales. Because they normally charge an upfront fee, she advises you ask for a few testimonials.
However, given it is a property company, Sarah feels you may be best placed talking to a property agent, who are likely to know other landlords who may be interested in buying the company wholesale. She is keen to point out you should speak to your accountant about undertaking a valuation of the company.
Sarah agrees with you that selling the company 'may be more tax efficient this is because you will pay capital gains tax at 24pc'.
She also says: 'If you sold the properties inside the company, then there would be corporation tax to pay at between 19pc and 25pc depending on your profit level. You would then, of course, still have to extract that money from the company as either a dividend or salary attracting personal tax.'
Sarah wanted to highlight that selling a company is different to selling a property, so you'll need to make sure you have a solicitor who has experience in company sales.
When selling a company there are some things you need to remember and would be worth you preparing in advance for, she advises. They include:
Due diligence
Because the person buying your company is also buying its history, they will undertake due diligence to check you don't have any skeletons in the closet. This means you should conduct a thorough audit of the properties.
Health check
Before you go to market, check all your leases are up to date and required certificates (such as gas safety) are valid. Also ensure your accounting records are up to date and accurate.
I found Sarah's advice to be illuminating, and given I do own some properties in a company, it was really useful to think about these scenarios.
What did occur to me (as regards the properties I hold personally) was the flexibility that has been afforded me for selling as and when the time arises, rather than lock-stock-and-barrel as per the company sale. Of course, that brings with it a whole new set of problems (notably tax), so it's really important to think about this and plan well in advance.
I've often reflected if I made the right decision not to have sold my portfolio as a job lot all those years ago, but for me at that time, I wasn't ready for a full market exit. The path I chose – to restructure and sell individual properties – has been arduous, stressful and expensive.
Going forwards, I'm sure property company sales will become more common and it's likely we'll soon see a whole new breed of estate agents catering specifically for this sector of the market. However, the same rules still apply – prepare and plan in plenty of time.