Should You Buy Property Through a Limited Company or in Your Own Name in 2025?

Personal Use (Owner-Occupied Property)

When buying your main residence, it is almost always simpler and more advantageous to hold title in your own name. Stamp Duty Land Tax (SDLT) for a first home is zero on the first £425,000 (as of 2025) with no 3% surcharge – whereas a company always pays the higher corporate SDLT rate (currently an extra 5% surcharge on residential purchases ). Crucially, an individual owner benefits from Private Residence Relief, meaning any gain on sale is exempt from Capital Gains Tax (CGT) . By contrast, a company-owned home would trigger corporation tax on any profit (and the owner would incur a Benefit-in-Kind tax charge if living there rent-free ).

Income Tax vs Corp Tax: As an individual living in your own home you pay no rental income tax. A company-owned home occupied by a director would either require paying full commercial rent (with the rent taxed at 25% corporation tax in the company) or attracting a substantial taxable benefit if not . Overall, personal ownership avoids double-taxation (no corporation tax or dividend tax) on the property.
Stamp Duty: Personal buyers pay the normal residential SDLT scale (0–12%) with no 3% second-home surcharge on a first home. A company pays the full corporate SDLT rate – effectively up to 22% on expensive homes (17% +5% surcharge) .
CGT: Individuals enjoy a £3,000 annual CGT allowance (2025/26) and full PRR on their main home ; companies have no CGT allowance and pay 25% corporation tax on gains.
Mortgage: Residential mortgages are easier for individuals – lower rates, higher loan-to-value (LTV), and a straightforward approval process. Companies must use a buy-to-let mortgage, which carries higher interest rates and deposit requirements and often requires a personal guarantee . (Most lenders will forbid the director from living in a buy-to-let property anyway .)
Liability: An individual owns the home outright (no corporate separation), whereas a company provides limited liability in theory, but banks will usually demand personal guarantees on company mortgages .
Inheritance Planning: Personal ownership benefits from Inheritance Tax (IHT) reliefs: on death, a main home passed to direct descendants can use the “Residence Nil-Rate Band” (up to £175,000 per person) in addition to the £325,000 nil-rate band . A company-owned home would enter the company’s value; the owner’s estate would then include the company shares (generally taxed at 40% above the nil-rate band, unless complex trust planning is used) .
Admin/Compliance: Personal ownership requires only a Stamp Duty return and, if rented, self‑assessment tax returns. A company incurs much more: annual accounts, corporation tax returns, filings to Companies House, etc .

Recommendation: For a personal (owner-occupied) home, purchase in your own name. Corporate ownership makes no financial sense: you’d face benefit‑in‑kind tax or rent charges, plus higher Stamp Duty and eventual corporation tax, with none of the principal residence exemptions . Buying in your personal name maximises reliefs (no stamp duty surcharge, PRR on sale) and minimises costs and compliance burdens.

Aspect	Personal Ownership	Limited Company Ownership
Stamp Duty (SDLT)	Standard residential rates, no 3% surcharge for first home. (E.g. up to £425k 0% SDLT.)	Normal SDLT rate +5% corporate surcharge on all purchases . No first‑home relief.
Tax on Sale	No CGT on sale (Private Residence Relief applies) .	Corporation Tax (25%) on any gain. No CGT allowance.
Use/Living	No tax on occupancy; fully private.	If occupied by owner: taxable Benefit-in-Kind (BIK) or must pay market rent .
Mortgage	Residential mortgage – typically lower rates, smaller deposit (often 90–95% LTV).	Buy-to-let mortgage required – higher rates, ~25–30% deposit, personal guarantee usually demanded .
Liability	Owned personally – asset at risk in lawsuits/claims (but home usually protected by equity).	Company asset – limited liability, but lenders likely require personal guarantees .
Inheritance	Included in estate; main-residence nil-rate band (£175k) + £325k NRB often applies .	Estate holds company shares; IHT on share value (40% of value above NRB). Share transfers allow planning but no automatic RNRB.
Admin/Compliance	Simple: stamp-duty return, personal tax records. No Companies House filings.	Complex: company formation, annual accounts, tax returns, shareholder records, etc .

Rental Property (Buy-to-Let)

For investment (buy-to-let) property, there are significant trade-offs between owning personally vs via a UK Ltd company. Individuals pay income tax on rental profits (20–45% depending on bracket) , whereas companies pay 25% (main rate) corporation tax on profits . Key differences include:

Stamp Duty: Both will incur the higher-rate SDLT surcharge (3% for individuals, 5% for companies) on an additional residential property . For example, on a £400k buy-to-let the SDLT is £22k personally but £34k via company – £12k more in tax upfront .
Income Tax vs Corporation Tax: Individual landlords pay tax on net rental income at their marginal rates. A higher‑rate taxpayer pays 40%, plus 45% above £125k . By contrast a company pays 25% on its net rental profit . Thus companies can be much more tax-efficient for high-earners.
Mortgage Interest Relief: A crucial difference is mortgage interest. Companies can deduct 100% of mortgage interest as a business expense . Individuals cannot – due to Section 24 rules they receive only a 20% tax credit on interest , effectively losing tax relief (especially impactful for higher-rate taxpayers).
Capital Gains: On sale, individuals pay CGT at 18%/28% (2025 rates) on gains above the £3,000 allowance . Companies instead pay 25% corporation tax on the gain (no allowance) . (Moreover, taking profits out of a company later incurs dividend tax.)
Mortgage Availability/Terms: Mortgages for personal buy-to-let are relatively plentiful and typically ~0.5–1% cheaper in interest than corporate buy-to-let loans . Lenders usually allow personal landlords to borrow at up to ~80–85% LTV; companies often must put down 25–30% and accept higher rates . Most company loans also require personal guarantees .
Liability Protection: A company provides limited liability: creditors cannot directly claim the owner’s personal assets. However, in practice most lenders demand director guarantees on company mortgages , reducing this benefit. A personal landlord has no corporate veil – liabilities on the property (e.g. if heavily mortgaged) ultimately lie with them.
Inheritance/Estate Planning: A personal buy-to-let becomes part of your estate and is subject to IHT (40% on value above exemptions). A property company’s shares are inherited instead; if it’s purely a property investment company, shares generally do not qualify for Business Property Relief , so IHT still applies. (The advantage of a company is you can gift or hold shares more flexibly, but there is no automatic tax exemption.)
Admin/Compliance: Personal ownership means only a Self-Assessment tax return (and letting accounts) each year. A company must file annual accounts at Companies House, complete corporation tax returns, possibly VAT returns, etc , adding time and accounting fees.

The net effect is that corporations save tax on profits and interest (at the cost of administrative complexity and double-taxation on exit), whereas personal ownership is simpler and cheaper to fund but can result in higher taxes if you are a high earner.

Recommendation: For a buy-to-let portfolio, if you are a higher-rate taxpayer or plan to build multiple properties, owning through a company often pays off . The 25% corporation tax plus full interest relief can far undercut 40% personal tax plus 20% interest credit. However, if you are basic-rate or only buying one/few flats, remaining individual is usually easier and sometimes cheaper once mortgage and admin costs are considered . In practice:

Small-Scale Landlords (1–2 properties, lower tax bracket): Likely better to stay in personal name (simpler loans, lower up-front fees, use of personal allowances) .
Large Portfolio or High-Income Landlords: Likely better to use a company (tax-efficient reinvestment of profits, higher tax threshold) .

Aspect	Personal Landlord	Limited Company Landlord
Stamp Duty	Pays standard residential SDLT plus 3% surcharge (additional home) . (E.g. 8% on amount £250–925k.)	Pays standard SDLT + 5% surcharge on all residential purchases (no exemptions). More expensive upfront (e.g. £12k more on a £400k buy ).
Tax on Rental Income	Taxed at personal rates (20–45% depending on bracket) . Profits push up your income tax bands.	Taxed at 25% Corporation Tax (smaller rates if profits under £50k). Retained profits can be reinvested without personal tax.
Mortgage Interest	Limited relief: since 2020 you get only a 20% tax credit on interest (phasing out full relief) .	Full tax deduction for mortgage interest and finance costs against company profits .
Capital Gains (on sale)	CGT at 18%/28% on gains above £3k annual allowance . (No PRR relief on buy-to-let.)	Corporation Tax at 25% on gain (no allowance). Any withdrawal as dividends later triggers further tax.
Mortgage Terms	Easier: many buy-to-let products, lower rates, smaller deposits (~75–85% LTV).	Harder: fewer lenders, higher rates (~0.5–1% more) , larger deposits (25–30% LTV), strict underwriting (usually personal guarantee) .
Liability	Personal liability for debts; property is your personal asset.	Limited liability shields personal assets if no personal guarantee is given .
Inheritance	Property value is in your estate (subject to IHT 40% above thresholds).	Estate includes value of shares. No RNRB, and property companies generally do not get 100% BPR (IHT likely on share value).
Admin/Compliance	Simple: Self-Assessment annually (rental income page).	Complex: Annual company accounts and corporation tax return, plus VAT or payroll compliance if relevant .

Business Use (Commercial/Office Premises)

For a trading business acquiring commercial or mixed-use property (e.g. offices, shops, warehouses), the trade-off depends on your existing business structure:

Ownership Structure: If you already operate as a limited company, it often makes sense for the company to own its premises. If you operate as a sole trader/partnership, you can hold the property personally and use it in the business (treated as a business asset). Creating a new company solely to own one property generally adds complexity (admin and double-tax) unless asset protection is needed.
Stamp Duty (LBTT/LTT/SDLT): Commercial property attracts the non-residential rates of property tax, which are lower (up to 5%) and do not incur the 3% residential surcharge . Individuals buying commercial property pay the same rates. A company also pays no extra surcharge on commercial land. (Only residential purchases incur the corporate 5% uplift .)
Tax on Profits/Sale: A sole trader’s profit from the business (including any rental to themselves) is taxed at personal income tax rates (20–45% plus Class 2/4 National Insurance). A company pays 25% corporation tax on trading profits. On sale of the property: if you own it personally as part of the business, you pay CGT (typically 18%/24% after allowances; 10% if Business Asset Disposal Relief applies and conditions are met). A company pays 25% corp tax on any gain . (The company owner then pays tax again to withdraw the proceeds.) Notably, commercial property used in trade may qualify for Business Property Relief on inheritance (unlike residential lettings) , offering potential IHT savings if held correctly.
Mortgage/Financing: Commercial mortgages are generally available to both individuals and companies, but often on similar terms. If the company borrows, banks may require personal guarantees from the directors. For a sole trader, the building may secure borrowing against the owner personally. Interest rates and deposits tend to be higher than for residential mortgages but don’t differ much between personal vs corporate ownership in commercial lending (both demand ~20–25% deposit typically).
VAT: If a business (company or sole trader) buys commercial property, VAT may be charged by the seller (especially if they have opted to tax). A VAT-registered company can usually recover the VAT on purchase and on refurbishment costs, whereas a non-VAT business or individual simply bears the VAT. Residential properties are normally exempt from VAT.
Liability: As with rentals, a company owner gets limited liability (subject to any guarantees). A sole trader has unlimited liability. For a trading business, keeping the property in the company can protect other assets if the business fails, whereas a sole proprietor’s house/car could be at risk.
Inheritance: A commercial property business may qualify for Business Property Relief if structured as a trading company. For example, if the company uses the building as part of its trade, its shares could attract 100% BPR , potentially removing IHT on that value. In contrast, a personally-owned business property can be left to heirs, but the estate can only use the normal nil-rate bands (or BADR on sale).
Admin/Compliance: Similar to rentals, a company must do accounts, CT returns, etc. A sole trader reports business results on a personal tax return (one set of accounts), which is simpler.

Recommendation:

If your business is already a limited company, it is usually best for the company to buy and hold its commercial premises. This keeps assets and liabilities together and allows capital allowances (for fixtures) and potential IHT relief on shares .
If you are a sole trader or small partnership, owning the property personally (and trading from it) can suffice, but consider incorporating if asset protection or tax planning is a priority. Incorporation adds corp tax on gains and eventual dividend tax, so it’s typically justified only if you want to shield personal assets or benefit from full interest/cost relief in a high-tax scenario.

Aspect	Sole Trader/Personal Ownership	Limited Company Ownership
Stamp Duty (SDLT/LBTT/LTT)	Non-residential rates only (no extra surcharge). Up to 5% on large values .	Same non-residential rates (no 5% residential surcharge applies) .
Tax on Profits	Profits taxed at personal income rates (20–45% plus NI).	Profits taxed at 25% corporation tax (lower for small profits).
Capital Gains (Sale)	CGT at 18/24% on gain (after allowances). Business Asset Disposal Relief (10%) may apply if criteria met.	CT 25% on gain (no CGT allowance). No relief except strategies (e.g. selling company shares might use BADR).
Mortgage Terms	Commercial mortgage in personal name: usual LTV ~75–80%, interest ~5–6% (varies).	Commercial mortgage in company: similar terms, but often requires personal guarantee and sometimes higher deposit.
Liability	Unlimited. Business debts (including mortgage) are personally enforceable.	Limited liability (except for any personal guarantees on loans).
Inheritance	Property forms part of estate. Estate can use nil-rate bands (£325k NRB, £175k RNRB if residence, though RNRB not normally available on commercial).	Estate includes company shares. If property is trading asset, Business Property Relief (100%) may cover share value , potentially reducing IHT.
Admin/Compliance	One set of accounts reported via Self-Assessment. No CH filings.	Full corporate compliance (accounts, CT returns, CH records) .