A growing share of investment portfolios now sits inside limited companies, usually a special purpose vehicle or SPV, which means a growing share of portfolio deals arrive with a choice attached: buy the buildings out of the company, or buy the company itself. The tax difference is large enough to decide deals on its own. So is the liability difference, and sales particulars tend to mention only the tax saving.
In short
- An asset sale buys the buildings; a share sale buys the company, and everything it has ever done.
- Buying the shares costs 0.5% of the price paid; buying a £2m portfolio as assets can cost six figures, or £89,500 under the six-dwelling rule.
- Buying shares means buying every debt, guarantee, charge, dispute, tax position and compliance failure the company carries.
- A latent (unrealised) gain inside the company does not disappear at sale; the buyer inherits the future tax bill.
- Run both tax computations before you talk price, and never treat a share deal without real warranties as a genuine discount.
In this guide: 6 sections
Here is how the two routes compare, with the current tax positions checked against gov.uk guidance in September 2026, and the due diligence that a share purchase actually requires.
Share sale and asset sale compared
An asset sale transfers the properties. Titles move to your name or your company, the seller’s company keeps its own history, and you start clean. A share sale transfers the company: you buy the shares, the company continues owning the properties, and nothing about the titles changes at all.
Everything else in this guide follows from that structural difference. In an asset sale you buy buildings. In a share sale you buy a corporate person with buildings inside it, together with everything else that corporate person has ever done.
| Point | Asset sale | Share sale |
|---|---|---|
| What you buy | The properties | The company that owns them |
| Transfer tax | SDLT, or non-residential rates on six or more dwellings | 0.5% on the price paid for the shares |
| Liabilities | The seller’s company keeps its own history | Every debt, guarantee, charge, dispute and tax position comes with it |
| Latent gain | Not inherited | Stays inside the company |
| Due diligence | Property diligence | Property diligence plus a corporate layer |
| Lending | New finance on the properties | Existing loans may not survive a change of control |
| Contract | Property contract | Share purchase agreement |
Stamp duty is the headline saving
Property transfers attract stamp duty land tax. Company purchases by investors carry the additional property surcharge, now 5% on top of standard rates, and corporate buyers of single dwellings over £500,000 can face a flat 17% rate unless a relief such as the rental business relief applies, points covered fully in our stamp duty guide for investment property.
Share transfers are taxed differently. Buying shares in a UK company carries stamp duty or stamp duty reserve tax at 0.5% of the price paid for the shares. On £2m paid for the shares of a company with no borrowing, that is £10,000. Where the company carries debt, the price paid for the shares is usually lower, and so is the tax.
Shares, 0.5% stamp duty reserve tax
£10,000
Assets, six-dwelling non-residential rate
£89,500
Buy the same buildings as assets and the SDLT bill depends on the structure: it can run to six figures under standard residential rates plus the 5% surcharge, or to £89,500 where the portfolio qualifies for the six-dwelling rule covered in the next section.
Either way the share route costs the buyer a fraction of it. Sellers often prefer a share sale for their own tax reasons: if the company sells the buildings, the gain is taxed inside the company as a chargeable gain, and taking the cash out to the owners, for example as dividends, can be taxed again. Selling the shares is a single disposal, on which the shareholder may pay capital gains tax.
The lower tax cost is still not free money, because it comes with the risks in the next two sections.
Asset sales and the six-dwelling rule
Where portfolios do trade as assets, one rule matters more since the SDLT relief for multiple dwellings was abolished on 1 June 2024. HMRC’s guidance on non-residential rates confirms that six or more residential properties bought in a single transaction are taxed at the non-residential rates: nil to £150,000, 2% to £250,000 and 5% above, with no additional property surcharge.
Buying six or more dwellings in a single £2m transaction produces £89,500 of SDLT under those rates, far below the residential-plus-surcharge equivalent. So a portfolio asset purchase is not automatically the expensive route. The genuine comparison on any deal is the 6-plus non-residential calculation against 0.5% on shares, and both numbers should be on the table before you negotiate price.
You buy the company’s history too
Buy the shares and you buy every debt, guarantee, charge, dispute, tax position and compliance failure the company has accumulated, whether or not anyone remembered to disclose it. The buildings might be perfect while the company that owns them carries a personal guarantee from a previous venture or an unresolved HMRC enquiry.
This is not a reason to avoid share purchases. It is the reason they are priced below the asset equivalent and papered differently. The protection is contractual: warranties from the seller about the company’s position, indemnities for identified risks, and retention structures where the answers were thin.
A share deal without meaningful warranties is not a discount, it is a transfer of unknown liabilities at a price you cannot have calculated.
Latent gains do not disappear
The company’s tax base cost in its properties does not reset when the shares change hands. If the company bought its portfolio years ago at half today’s values, the unrealised gain sits inside the company, and corporation tax on it falls due when the company eventually sells the buildings.
You are buying that future tax bill along with the bricks.
Sophisticated pricing reflects this with a discount against the latent gain, commonly a negotiated fraction of the full liability, since the tax only crystallises on a future disposal that may be years away. Get the company’s base costs and its history of capital allowances early, model the embedded liability, and make the discount explicit in the offer rather than hoping the point goes unnoticed in either direction.
Due diligence goes corporate
A share purchase keeps all the property diligence, title, tenancies, condition and compliance on every building, and adds a corporate layer: statutory accounts, tax returns and clearances, charges at Companies House, employment and pension exposure, ongoing contracts and any litigation. The contract is a share purchase agreement, not a property contract, and it needs advisers who do corporate work, not just conveyancing.
Check the lending position early.
Existing facilities almost always contain change of control clauses, so the seller’s cheap fixed-rate loan does not automatically survive your purchase, and refinancing terms belong in your underwriting from the start.
The structures that look simplest in the brochure, a clean special purpose vehicle with one asset and one loan, are usually the ones where this works best.
What this means for property investors
Run both tax computations on every portfolio deal before you talk price: the asset route with the six-dwelling non-residential rates, and the share route at 0.5% with a discount for the latent gain and a warranty package that actually protects you. The right structure differs deal by deal, and the seller’s preferred structure is a negotiating position, not a fact of the transaction.
Do not pay for the stamp duty saving out of your diligence budget. The share route saves tax precisely because it transfers history, and the history is only cheap when you have read it. Portfolio and company-held stock appears regularly on our books, from portfolios for sale to individual multi-unit holdings.
This is general information, not advice on your position, so take independent advice before acting. Browse the current stock at our live listings or join the insider list to see portfolio deals before they reach the market.