Should I buy a buy-to-let in a limited company or in my own name?

The short answer

There is no answer that suits everyone, because the two routes are taxed in different places. In your own name the rent profit is added to your income and taxed at your Income Tax rates, and mortgage interest is not deducted: it earns a tax reduction at the basic rate instead. In a limited company the interest is deducted before Corporation Tax, which is lower than the higher rate of Income Tax, but the profit belongs to the company, and taking it out as a dividend or salary is taxed a second time.

Which route leaves you more turns on your tax band, the size of the mortgage and whether you need the profit paid out to you. The worked example below runs one case each way. Stamp duty, mortgages, the yearly paperwork and the sale at the end also move the result, and each is below.

This page is about buying. Moving a property you already own into a company is a different question with its own costs, covered in the blog guide on SPV transfer costs linked at the end.

How the tax works each way

In your own name. The profit is taxed at your Income Tax rates. GOV.UK’s “Changes to tax relief for residential landlords: how it’s worked out” (read 20 October 2026) says finance costs get a tax reduction at the basic rate value, currently 20%, of the lowest of your finance costs, your property profits and your adjusted total income above the personal allowance. A higher-rate taxpayer pays 40% on the profit and gets 20% back on the interest
From April 2027. GOV.UK’s policy paper “Income Tax: changes to tax rates for property, savings and dividend income” (published 27 November 2025, read 20 October 2026) sets separate property income rates of 22%, 42% and 47% from 2027 to 2028 for England, Wales and Northern Ireland. Check HMRC’s guidance for that year before you rely on how the interest reduction is worked out
In a company. GOV.UK’s “Corporation Tax rates and reliefs” (read 20 October 2026) gives 19% on profits of £50,000 or less, 25% above £250,000, and marginal relief in between, with the thresholds shared between associated companies. GOV.UK’s “Corporation Tax” page says taxable profits include investments and chargeable gains, so a company’s rent and its gain on a sale are both inside Corporation Tax
Taking the money out. GOV.UK’s “Running a limited company” (read 20 October 2026) lists salary, dividends and directors’ loans, and says a company must not pay more in dividends than its available profits. GOV.UK’s “Tax on dividends” gives a £500 dividend allowance and rates of 10.75%, 35.75% and 39.35% from 6 April 2026 to 5 April 2027

A worked example, so the shape is clear

An illustration only, for one tax year (2026 to 2027), for a landlord in England. The property makes £10,000 a year before mortgage interest, and the interest is £6,000. In each case the landlord’s salary already puts the property income, or the dividend, wholly in the band named, and the £500 dividend allowance is not used elsewhere. Accountancy fees, mortgage rates and stamp duty are left out.

Higher-rate taxpayer, own name. 40% of £10,000 is £4,000, less 20% of £6,000 (£1,200), so £2,800 tax and £1,200 left after interest and tax
Higher-rate taxpayer, company, all paid out as a dividend. Corporation Tax at 19% on £4,000 is £760, leaving £3,240. The first £500 of dividend is taxed at 0% and the other £2,740 at 35.75%, which is £979.55. £2,260.45 is left in your hands, or £3,240 stays in the company if nothing is paid out
Basic-rate taxpayer, own name. 20% of £10,000 is £2,000, less the £1,200 reduction, so £800 tax and £3,200 left
Basic-rate taxpayer, company, all paid out. £760 Corporation Tax, then £2,740 at 10.75%, which is £294.55, so £2,945.45 left

Before company running costs, the company comes out ahead for the higher-rate taxpayer and behind for the basic-rate one. Annual accounts and a Company Tax Return cost money every year, which shrinks the company’s lead in the first case and widens the gap in the second. Run your own figures, and take advice from an accountant before you buy.

Stamp duty when you buy

Personally. GOV.UK’s “Stamp Duty Land Tax: residential property rates” (read 20 October 2026) says you usually pay 5% on top of the standard rates if you own another residential property. Most people buying a buy-to-let already own their home, so most pay the higher rates
Through a company. GOV.UK’s “SDLT: buying an additional residential property” (read 20 October 2026) says companies must pay the higher rates on any residential property of £40,000 or more, whatever else they own. GOV.UK’s “SDLT: corporate bodies” adds a 17% rate on residential property over £500,000 bought by certain corporate bodies, with relief that may be available where the property is used in a property rental business

For a landlord who already owns a home, the stamp duty on a typical buy-to-let is often the same either way. The free stamp duty calculator shows the figure for a price.

Mortgages

Fewer lenders offer loans to a company set up to hold property, and they price and test them separately from personal buy-to-let loans. Ask a broker for both quotes on the same property before you choose, and ask whether the lender wants a personal guarantee from the directors, because that puts your own money back on the line.

The sale at the end

In your own name a gain is taxed under Capital Gains Tax. GOV.UK’s “Capital Gains Tax rates” (read 20 October 2026) gives 18% and 24% from 6 April 2026 and a £3,000 allowance for 2026 to 2027. In a company the gain is part of the company’s profits for Corporation Tax, and the money is still inside the company until you take it out.

Making Tax Digital and the paperwork

Own name. GOV.UK’s “Check if you’re eligible for Making Tax Digital for Income Tax” (read 20 October 2026) brings in landlords registered for Self Assessment whose qualifying income from self-employment and property is over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. That means quarterly updates and a final declaration
Company. A company pays Corporation Tax rather than Income Tax, so its rent is not part of your Making Tax Digital for Income Tax figures. Instead, a director must prepare annual accounts, file them with the Company Tax Return and pay the tax, as GOV.UK’s “Running a limited company” sets out, and stays legally responsible even when an accountant does the work

How LetCompliance handles either choice

Whichever way you buy, the let runs the same way: the advert, referencing, the tenancy agreement, the deposit, rent by Direct Debit, repairs and certificates. The difference is the tax.

On each property, answer Whose tax return is this property in? with My own tax return, A limited company’s or Not in my tax return
A company property is left out of your SA105 figures, your Making Tax Digital updates, the accountant view and the Section 24 figures, and stays in the rent pages, Finance and reports
A personal property feeds your SA105 figures and the quarterly updates. Making Tax Digital and the SA105 tax pack are on paid plans, from Single at £7.99 a month
Personal and company properties sit in one account, so a mixed portfolio is run from one login

Common mistakes

Comparing the Corporation Tax rate with your Income Tax rate and forgetting the tax on taking the money out
Buying personally now and planning to move it into a company later, without pricing the transfer
Forgetting the company’s yearly running costs and filing duties
Using a tenancy agreement that names you when the company is the landlord

Is a limited company worth it for one buy-to-let?

It depends on the figures. In the worked example above the company leaves more in hand only for the higher-rate taxpayer, and that is before the yearly cost of company accounts. Run it with your own rent, interest and tax band, and have an accountant check it.

Can I put my existing buy-to-let into a company?

You can, but it is treated as a sale to the company, with stamp duty and possibly Capital Gains Tax to pay. The blog guide on SPV transfer costs works through the numbers.

Do company landlords need Making Tax Digital?

Not Making Tax Digital for Income Tax, for the company’s own rent, because the company pays Corporation Tax. If you also own property personally, that side counts towards your own threshold.

Can I hold some properties personally and some in a company?

Yes, and many landlords do. In LetCompliance both sit in one account, and only the personal ones reach your Self Assessment figures.

The honest limits

This is general information, not tax advice on your circumstances. An accountant should check the numbers before you commit
LetCompliance does not prepare company accounts, a Company Tax Return or a confirmation statement
The figures above are for England; Scottish taxpayers pay different Income Tax rates
Documents name the landlords on each property’s Landlords card. Where a company is the landlord, check that every agreement and notice names it before it is signed or served