Ltd Company vs Personal Ownership
Should you hold your rental property personally or through a limited company? Compare the tax implications side by side using 2025/26 UK rates.
Your situation
Rent minus allowable expenses (not mortgage)
Your total non-rental income — determines tax band
Ltd company options
Typically £12,570 (personal allowance) to minimise NIC
Comparison
Personal ownership saves you ~£2,505/year
Based on your inputs. See detailed breakdown below.
Personal ownership
Limited company
Note: This is a simplified comparison. It does not account for employer/employee NIC, dividend waivers, multiple directors, pension contributions, or the cost of transferring existing properties to a company (which triggers stamp duty and CGT). Always consult a specialist property tax accountant.
Key factors to consider
Advantages of a Ltd company
- • Mortgage interest is fully deductible (no Section 24 restriction)
- • Corporation tax (19-25%) is lower than higher-rate income tax (40-45%)
- • Profits can be retained in the company and reinvested
- • Can be more tax-efficient for higher-rate taxpayers with multiple properties
- • Easier to bring in business partners or transfer shares
Advantages of personal ownership
- • Simpler to set up and run — no Companies House filing
- • No accounting fees (typically £1,000-2,000/year for a Ltd)
- • Capital Gains Tax annual exempt amount available on sale
- • Private Residence Relief may apply if you lived there
- • Wider choice of mortgage products and often lower rates
- • No double taxation (corp tax + dividend tax)
Section 24 (mortgage interest restriction): Since April 2020, personal landlords can no longer deduct mortgage interest from rental income. Instead, they receive a 20% tax credit. This particularly hurts higher-rate taxpayers, making Ltd companies more attractive for leveraged investments.
Corporation tax marginal relief: Companies with profits between £50,000 and £250,000 pay an effective rate between 19% and 25%, calculated using HMRC's marginal relief formula. This calculator applies the exact formula.
Transferring existing properties: Moving a property from personal ownership to a Ltd company counts as a sale. You'll pay Stamp Duty (the company buys it) and potentially Capital Gains Tax (you sell it). This cost can be significant and may take years to recoup.
New purchases: If you're buying new properties, a Ltd company is often the better choice for higher-rate taxpayers. For existing properties, the transfer costs usually make it not worthwhile unless you have a large portfolio.
This calculator provides a simplified overview. Tax planning for property investment is complex — always consult a specialist property tax accountant before making structural decisions.
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