If you’re a landlord in the UK, you’ve probably asked yourself: “Should I hold my rental property in my personal name, or set up a limited company for buy-to-let?”

The truth is — there’s no universal answer. The right property investment structure depends on your tax position, portfolio size, and long-term goals. Let’s explore the tax benefits and drawbacks of using a limited company for property ownership.

📉 Why Landlords Are Considering Limited Companies

Since the changes to mortgage interest relief, landlords who own property in their personal name can no longer deduct the full cost of mortgage interest. Instead, they only receive a 20% tax credit.

For higher-rate and additional-rate taxpayers, this means bigger tax bills. That’s why more property investors are looking at limited company buy-to-let structures — where mortgage interest remains a fully deductible expense.

✅ Advantages of Holding Property in a Limited Company

1. Full Mortgage Interest Relief
   A limited company can deduct 100% of mortgage interest before paying corporation tax on rental profits.
2. Lower Corporation Tax Rates
   Corporation tax is charged at 19–25%, often less than the 40–45% income tax rates faced by landlords who own property personally.
3. Flexible Tax Planning
   • Leave profits in the company to reinvest in more property.
   • Take dividends at a time that suits you.
   • Add family members as shareholders to share income more tax-efficiently.
4. Inheritance Tax & Estate Planning
   Passing on company shares can sometimes be easier than transferring property directly.

⚠️ Drawbacks of Using a Limited Company

1. Extra Costs & Admin
   You’ll need to file annual company accounts and corporation tax returns. Accountant fees will increase.
2. Higher Mortgage Rates
   Limited company mortgages often come with higher interest rates and stricter lending criteria.
3. Capital Gains Tax & Stamp Duty on Transfers
   Moving an existing property portfolio into a company is treated as a sale — which can trigger Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT).
4. Dividend Tax
   When you withdraw profits, you’ll pay dividend tax in addition to corporation tax.

🏡 Who Benefits Most From a Limited Company Structure?

• Higher-rate taxpayers with multiple buy-to-let properties.
• Landlords planning to reinvest profits rather than withdraw them.
• Portfolio landlords aiming for long-term property investment growth.

If you only own one rental property or your profits are modest, personal ownership may remain the simplest and most tax-efficient route.

🔑 The Bottom Line

Setting up a limited company for property investment can bring significant tax advantages for landlords, especially when it comes to mortgage interest relief and corporation tax savings.

But — it’s not always the right move. Transferring property can trigger CGT and stamp duty, and ongoing costs can outweigh the benefits for smaller landlords.

Before making a decision, speak to a qualified accountant who understands property tax planning.

📞 Need advice on whether to move your buy-to-let into a limited company?
At Taxes Done Right Ltd, we specialise in landlord tax and property investment structures.

👉 Call us on 0161 710 1901
👉 Email Tax@TaxesDoneRight.co.uk
👉 Visit www.taxesdoneright.co.uk

We’ll help you structure your rental property portfolio in the most tax-efficient way possible.