Is it better to buy a buy-to-let through a limited company?

For higher-rate taxpayers building a portfolio it often is, because a company deducts mortgage interest in full and pays corporation tax, sidestepping Section 24. For a basic-rate taxpayer or a single low-geared property, the extra costs of a company usually outweigh the benefit. It depends on your tax band, gearing and whether you need the income now.

What are the downsides of a limited company buy-to-let?

Company buy-to-let mortgages usually carry higher rates and fees, extracting profit as dividends is taxed again, there are annual accountancy and filing costs, and moving existing personal properties into a company can trigger stamp duty and capital gains tax.

Can I move my existing buy-to-lets into a company?

You can, but it is a sale from you to the company, so it can trigger capital gains tax and a fresh stamp duty charge including the 5% surcharge. Some incorporation reliefs may apply for genuine property businesses. Take specialist advice before doing it.

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Limited company vs personal name for buy-to-let

StackCheck · August 2026 · 7 minute read

"Should I buy through a limited company?" is the most-asked question in UK property, and the honest answer is: it depends on your tax band and how geared the deal is. It isn't a life hack that helps everyone — but for the right investor it changes the after-tax numbers dramatically. Here's how to think about it.

Why the question exists at all: Section 24

Since Section 24, individual landlords can't deduct mortgage interest before tax — they get a 20% credit instead. A company isn't affected: it deducts interest as a normal business expense and pays corporation tax on what's left. The more you borrow and the higher your tax band, the bigger that difference becomes.

The core trade-off

	Personal name	Limited company
Mortgage interest	20% credit only	Fully deductible
Tax on profit	Your income tax rate (20/40/45%)	Corporation tax (19–25%)
Getting money out	It's already yours	Dividends — taxed again
Mortgage rates	Lower, more choice	Usually higher, fewer lenders
Running costs	Minimal	Accountancy + filing every year

A worked example

A £200,000 property, 75% mortgage at 5.5%, rent £1,100/month, £3,250 a year of running costs. Pre-tax cashflow is the same either way — around £1,700 a year. After tax it splits:

Owner	After-tax cashflow
Personal — higher rate (40%)	−£630 / yr
Limited company (CT 25%)	£1,270 / yr

A higher-rate taxpayer holding this personally actually loses money after tax, while the same deal in a company keeps around £1,270 — a swing of roughly £1,900 a year, on one property, every year. Multiply across a portfolio and it's the whole game.

But watch the catch: that £1,270 is profit inside the company. To spend it personally you pay dividend tax on the way out. If you're reinvesting to grow, that rarely matters; if you need the income to live on now, it eats into the advantage.

When personal usually wins

You're a basic-rate taxpayer — Section 24 barely touches you, so the company's costs aren't worth it.
You're buying with cash or low gearing — little interest means little to shelter.
You want the rental income to live on now, not reinvest it.
It's a single property and you value simplicity.

When a company usually wins

You're a higher or additional-rate taxpayer with mortgages.
You're building a portfolio and reinvesting profits rather than drawing them.
You care about passing property on — shares can be easier to plan around than property held personally.

Don't move existing properties in lightly. Transferring a personally-owned property into your company is a sale to the company — it can trigger capital gains tax and a fresh stamp duty bill including the 5% surcharge. Incorporation relief sometimes helps genuine businesses, but this is specialist territory.

See your own numbers both ways

The decision is personal to your tax position, so a rule of thumb only gets you so far. StackCheck Pro shows a deal's after-tax cashflow personally and as a company, side by side, so you can see the actual £-difference on your deal before you talk to an accountant. The free analyser gives you the pre-tax picture and the Section 24 estimate to start with.

Run a deal and see the personal-vs-company split for yourself.

Open the analyser →

General information, not tax advice, and simplified (it ignores dividend extraction, the mortgage-rate gap and your wider income). The company-vs-personal decision has long-term tax consequences — take advice from a property accountant before you act.