Problem
- The client initially needed to refinance five properties immediately but had a long-term objective of consolidating their entire portfolio under a more tax-efficient structure
- Long-term goal: incorporate the portfolio from a Partnership to a Limited Company using Section 162 Incorporation Relief
- Traditionally, this would form a two-stage move, as the change of legal ownership would require a new mortgage
- Challenge: avoid costly revaluations and arrangement fees at the incorporation stage
Solution
Leveraged strong relationships with a specialist lender, including their head of credit, to design a financing strategy that aligned with the client's goals:
- Successfully refinanced the entire property portfolio under a single loan facility
- Negotiated a capital raise opportunity, unlocking over £500,000 for further investments
- Structured the application to allow for a seamless transition from Partnership to Limited Company ownership
Innovative lending structure: By securing credit approval for both Partnership and Limited Company ownership at the application stage, we eliminated the need for:
- New valuations (saving £22,000)
- A new arrangement fee (saving £60,000)
When the client incorporated their business six months later, their only costs were a small administration fee to the lender to cover issuing new facility letters in the limited company name.
Outcome
- Simplified portfolio financing with a single 5-year fixed loan, improving cash flow management
- Released over £500,000 in capital for new investments
- Reduced annual interest costs by over £80,000, even after the capital raise
- Seamlessly incorporated the property business without additional refinancing costs
Key Lesson
Pre-approving both ownership structures at application stage eliminated £82,000 in costs at incorporation. If you are weighing up incorporation, ask about ownership structure before you refinance, not after — that is when the saving is still available.
Tax treatment depends on individual circumstances. For specialist tax advice, please refer to an accountant or tax specialist.
Related buy-to-let finance
Buy-to-let mortgages · Portfolio mortgages · Limited company BTL · SPV mortgages · BTL rental cover (ICR) calculator
More case studies
Refinancing a 130+ property portfolio · £19m London portfolio refinance · International portfolio refinance