According to research from the NLA, 4 in 10 landlords are either seriously considering forming a limited company or looking into the option in the coming months.Can you - and more importantly should you - set up a company to pay less tax? Here's my complete guide on becoming incorporated.Can I set up as a company?Yes you can. It's completely legal, (despite it annoying those who see it as avoiding tax) and many individuals set up limited companies to manage their corporate matters.How will it help avoid the tax hit? Currently property investors can claim mortgage interest tax relief on their monthly interest repayments at the top level of tax they pay, i.e. a top rate taxpayer can claim up to 45% relief.In the Summer Budget, Osborne announced he was cutting this mortgage interest relief for buy-to-let landlords. From 2017, landlords will not be able to deduct the cost of mortgage interest. Instead, they will receive a tax credit equal to 20% of the interest cost. In other words, top-rate taxpayers will pay a lot more tax - and in some cases they'll even pay tax where they make no profit.Companies however will still receive mortgage interest relief and therefore only pay tax on their rental profits.Worked example London Accountancy firm, Accounts & Legal provided us with a worked example. We used the case of a high rate taxpayer, using a �500,000 BTL property with a 4% yield, a 75% loan to value interest only mortgage, and an interest rate of 2%.The graph shows that an individual landlord in 2016 and a company appear to take home the same amount of cash (�10,500).The company however would actually be �3,500 better off in value terms. This is because tax on dividends is only paid if the cash is withdrawn from the company; this tax can be retained and reinvested in the company.By 2021 when the individual is no longer receiving full tax relief on mortgage interest, the difference in take home cash is a lot starker. As a company you'll pay corporation tax rather than income tax on the profit you're left with after deducting all mortgage interest, which will leave you with substantially more cash after tax. The rate of corporation tax is set to decline by a further 1% to 18% in 2020, which will widen the gap even more.Interest rates make a big differenceThe difference between an individual and a company is even more obvious when the interest rate is higher. We have done the maths for a typical London based landlord with a buy-to-let mortgage on our Portico blog.The benefits of incorporating will also be starker when income is higher, i.e. for landlords with multiple properties, but landlords with only one property may not benefit as much - or at all - when other implications are considered.Who doesn't benefit from incorporating?Right now, incorporating sounds very attractive. But it will only benefit certain investors - such as higher and additional-rate taxpayers. It will not benefit basic rate taxpayers who aren't affected by the changes to tax relief, and may not benefit those with just one buy-to-let property.How do I incorporate?Setting up a limited company is relatively straightforward. You'll need to register on Company House and then you'll need to register the company with HMRC.The company will then need to buy your buy-to-let property (if you already have one) and could incur capital gains tax and potential stamp duty costs. The additional 3% stamp duty on those buying second properties will also be applicable to companies from April.Capital gains tax reliefThe property will incur capital gains tax if it has increased in value since it was bought.Landlords can claim capital gains tax relief (incorporation relief) however if they can show that the property is a business rather than an investment. Incorporation Relief is only a relief in the sense that you won't pay any tax until you sell.A landlord with multiple properties is potentially more likely to look like a 'business'� and receive this incorporation relief.How much will it cost to incorporate?Incorporating is a bit of a faff. If you decide to become a limited company, you must also ensure the ongoing compliance of the new company. This includes filing annual accounts and an annual return at Companies House, plus filing corporation tax returns with HRMC, which will cost between �500 and �1,000 a year.Getting a mortgage as a companyUnfortunately you will not be able to keep the same mortgage if you're transferring your property into a company structure.Mortgages for incorporated companies have come down in price recently due to increased demand - but they are still more expensive than buy-to-let mortgages, and they're also more complicated to obtain.What happens when I comes to sell? If you choose to incorporate your buy-to-let properties into a company, any gain will be subject to corporation tax when you come to sell. The distribution of the post-tax retained profits in the company will then either be subject to income tax or capital gains tax, depending on how the funds are distributed, acquiring an effective total rate of tax of between 42% and 44.7% for a high rate taxpayer.An individual however, will only suffer capital gains tax when it comes to selling an investment property of up to 28%, so if you're planning on selling your property in the near future, it's unlikely that incorporation is going to benefit you.What do I think?Incorporating is certainly not a one size fits all option. If you only have one buy-to-let property, or if you're planning on selling up in the near future, incorporating may not be the best option. That's because when you close the company, you'll take a big tax hit and your profits will be taxable within the company at 20%, and then when you take the money out of the company you will have to pay tax at either your dividend rate or as capital gains tax, depending on how you extract the money.Instead, I recommend cutting your interest costs by re-mortgaging and getting an up to date rental valuation on your property.If you're in the process of buying properties and you're a multi-property landlord, I would say that incorporating is the better option.Robert Nichols is Managing Director of London estate agents Portico, with branches in Acton, Battersea, Bloomsbury, Camden, Clapham, Dulwich, Fulham, Hammersmith, Highbury, Islington and West Hampstead.