Do I Need a UK Company, or Can I Buy Personally?
There is no universally right answer. It turns on borrowing, on what you do with the profit, and on how many properties you intend to own.
You can buy in your own name. Nothing requires a company, and for a single unmortgaged house bought for income, personal ownership is usually simpler and cheaper.
A company starts to make sense when you’re borrowing, when you intend to keep buying, and when you don’t need to take the profit out for years. It stops making sense when you want the money in your pocket each year, because you get taxed twice on the way out.
The one thing a company doesn’t do is remove UK residential property from UK Inheritance Tax. That myth has cost people a lot of money in structuring fees.
The core difference: how the profit is taxed
In your own name, rental profit is taxed as income. For 2026 to 2027 the England rates are 20% on income above the £12,570 personal allowance up to £50,270, 40% up to £125,140, and 45% above that. From 2027 to 2028, the rates that apply to property income specifically rise by 2 percentage points, to 22%, 42% and 47%. Verified on GOV.UK, 25 August 2026.
In a company, profit is taxed to corporation tax: 19% on profits of £50,000 or less, 25% on profits over £250,000, with marginal relief in between. Those thresholds are divided by the number of associated companies you control, so a stack of small companies does not multiply the small profits rate. Verified on GOV.UK, 25 August 2026.
On the face of it the company wins. The catch is what happens next.
Getting the money out is where companies lose
Money inside a company isn’t your money. To spend it personally you take a dividend or a salary, and that’s taxed again on top of the corporation tax already paid.
For 2026 to 2027, dividends above a £500 allowance are taxed at 10.75% at the basic rate, 35.75% at the higher rate and 39.35% at the additional rate. Verified on GOV.UK, 25 August 2026.
So a company is efficient if the profit stays in and buys the next property. It’s inefficient if you need to draw it out every year to live on. That single question decides the structure for most people.
Mortgage interest: the biggest genuine advantage
If you’re borrowing, this is usually the deciding factor.
An individual landlord of residential property cannot deduct finance costs from rental income. Relief is given instead as a basic rate tax reduction at 20%, fully in place since 6 April 2020. If you are a higher or additional rate taxpayer, that means you are taxed on rent you never see, because it went to the lender. Verified on GOV.UK, 25 August 2026.
A company isn’t subject to that restriction. It calculates profit under the corporation tax rules, and finance costs are dealt with there.
The more you borrow and the higher your personal tax rate, the more this matters. On an unmortgaged purchase it doesn’t matter at all.
Set against it: lenders generally offer fewer products to limited companies, usually at higher rates and with arrangement fees, and most will want a personal guarantee from the directors anyway. Get a broker to price both before you decide.
Stamp duty and ATED: check the price band first
Two company-specific charges get quoted at overseas buyers far more often than they actually apply.
The 17% SDLT rate. Certain corporate bodies pay Stamp Duty Land Tax at 17% on residential property costing more than £500,000. Relief is available where the property is used in a genuine property rental business, and there are other reliefs for developers, traders and employee accommodation. Below £500,000 the rate does not arise at all. Verified on GOV.UK, 25 August 2026.
ATED, the Annual Tax on Enveloped Dwellings. ATED is an annual tax payable mainly by companies owning UK residential property valued at more than £500,000. The chargeable amounts for 1 April 2026 to 31 March 2027 are:
| Property value | Annual charge |
|---|---|
| More than £500,000 up to £1 million | £4,600 |
| More than £1 million up to £2 million | £9,450 |
| More than £2 million up to £5 million | £32,200 |
| More than £5 million up to £10 million | £75,450 |
| More than £10 million up to £20 million | £151,450 |
| More than £20 million | £303,450 |
Verified on GOV.UK, 25 August 2026.
Relief is available where the property is let to a third party on a commercial basis and is not, at any time, occupied or available for occupation by anyone connected with the owner. For a genuine buy-to-let held in a company and let to unconnected tenants, that relief will normally apply and reduce the charge to nil. But you still have to claim it: the company must file a Relief Declaration Return through the ATED online service. The chargeable period runs 1 April to 31 March, and for a property held on the first day of the period the return is due by 30 April in the year of charge. Verified on GOV.UK, 25 August 2026.
The practical point for my patch: I buy terraced and semi-detached houses in South Yorkshire and North Nottinghamshire, and the completed purchases have been between £61,500 and £90,000. At those prices neither the 17% SDLT rate nor ATED is in play. If someone is using ATED to sell you a structure on a £75,000 house, ask them why.
The 5% additional dwellings SDLT rate does apply to company purchases, and the 2 percentage point non-resident surcharge applies on top of all other residential rates including those. Verified on GOV.UK, 25 August 2026.
Inheritance tax: a company does not solve it
Since 6 April 2017, an interest in a non-UK close company or overseas partnership is not excluded property for Inheritance Tax to the extent its value is attributable to UK residential property. Loans used to buy, maintain or enhance UK residential property, and assets held as security for those loans, lost excluded property status at the same time. Verified on GOV.UK, 25 August 2026.
Put plainly: holding a UK house through an offshore company doesn’t take it outside UK Inheritance Tax. Structures sold on that basis stopped working nearly a decade ago. See UK inheritance tax for foreign property buyers.
Where structure can help estate planning is in what is easier to pass on, and in what your own country’s rules do with company shares compared to foreign real estate. That’s a question for an adviser in both jurisdictions.
The admin nobody mentions when they sell you the structure
A company needs annual accounts filed at Companies House, a corporation tax return, a confirmation statement, a registered UK office, and an accountant who will charge you every year whether or not the property made money. Directors and people with significant control appear on the public register, so a company isn’t a privacy tool.
If the buying entity is not a UK company, it must register under the Register of Overseas Entities and disclose its beneficial owners before the Land Registry will deal with the transaction. Verified on GOV.UK, 25 August 2026.
Moving a property you already own personally into a company is a sale in law. It can trigger stamp duty and a capital gains charge. Decide before you buy, not after.
Where each one lands
| Own name | UK company | |
|---|---|---|
| Tax on profit | 20/40/45%, rising to 22/42/47% on property income from 2027 to 2028 | 19% to 25% corporation tax |
| Mortgage interest | Basic rate 20% tax reduction only | Dealt with under corporation tax rules |
| Getting profit out | It’s already yours | Taxed again as dividend or salary |
| Set-up and running cost | None beyond a tax return | Accounts, CT return, confirmation statement, accountant |
| Privacy | Owner shown on the Land Registry title | Directors and PSCs on the public register too |
| ATED | Not applicable | Applies above £500,000, relief usually available for genuine lettings, return still required |
| Inheritance tax on UK residential property | In scope | Also in scope |
| Suits | One or two properties, little or no borrowing, income you want to spend | Geared purchases, reinvested profit, a portfolio you intend to grow |
What to do next
Answer three questions before you speak to anyone about structure. Are you borrowing? Will the profit stay in the business or come out to you? How many properties do you expect to own in five years?
If it’s one house, bought with cash, for income you want to draw, personal ownership is very often the answer and the structuring fee is money wasted.
This is not tax advice. Rates and thresholds change, they interact with your own country’s tax system and with any double taxation agreement, and the right answer depends on facts we do not know about you. Every figure above was checked against GOV.UK on 25 August 2026 and should be re-checked at the time you act. Get a UK accountant and, if you are overseas, an adviser in your home country as well, before you commit. See also how to structure UK property ownership and what it costs to work with us.