Property hub / Personal or limited company
Buying personally or through a company: compare the tax
The same buy-to-let owned by you, by you and your partner, or by a company, with the main taxes from stamp duty to the sale. A quick version of the deal analyser.
Checked against legislation and HMRC guidance2026/27, with enacted 2027/28 ratesUpdated 3 October 2026
The owners
The company
Growth
What tips the balance
A company deducts all its mortgage interest and pays 19% to 25% corporation tax, so it tends to favour higher-rate taxpayers with large mortgages who leave profit in the business to grow. Personal ownership tends to favour basic-rate taxpayers and anyone who needs the income now, because company profit is taxed again as dividends when it is paid out.
Your tax band
Higher and additional rate taxpayers lose most from the interest restriction: they pay 40% to 45% (42% to 47% from April 2027) on profit before interest, but get relief at only 20% (22%).
Spend or reinvest
Profit kept in a company has only paid corporation tax, so more is left to buy the next property. Dividends above your allowances are taxed at 10.75%, 35.75% or 39.35%.
Property you already own
Moving an existing property into a company is treated as a sale at market value, with possible Capital Gains Tax and stamp duty. See the cost of incorporating.
Inheritance tax and family
Shares in a property company can be passed on gradually, and family members can hold different share classes, though dividends on shares given to a spouse or a minor child can be taxed on you. Rental businesses do not normally qualify for Business Property Relief, whether held personally or through a company.1
Running a company
A company files accounts, a corporation tax return and a confirmation statement each year, and its mortgages may cost a little more.
Common questions
Do limited companies pay more stamp duty?
Not usually on a property under £500,000: a company pays the same higher rates as an individual who already owns a home. Over £500,000 a company pays 17% unless it claims relief, for example by letting to unconnected tenants. The relief is withdrawn if, within three years, the property stops qualifying or someone connected is allowed to live there.
Can my company lend me the profit instead of paying a dividend?
A loan from a close company to a shareholder that is not repaid within nine months of the end of the company's accounting period triggers a temporary corporation tax charge at the dividend upper rate, refunded when the loan is repaid. A taxable benefit can also arise for you. Repaying money you lent to the company is tax-free.
Is a company better for inheritance tax?
Not automatically. Shares in a property investment company do not normally get Business Property Relief, but a company can make it easier to pass value to the next generation over time.
Sources (3)
- Inheritance Tax Act 1984, s 105(3).
- Corporation Tax Act 2010, s 455.
- Finance Act 2003, Sch 4A paras 5 and 5G.
Choosing a structure is a long-term decision
We look at your income, borrowing, plans for the portfolio and your family before recommending how to hold property.