Should you buy in your own name or through a UK company?

What a company does change, starting with what weighs most

There is a specific reason why the great majority of new buy-to-let purchases in the United Kingdom are made through a company today, and it is not general taxation: it is the treatment of financing interest. Four things change, and the first is the one that decides.

How each piece works

How financing interest is deducted

This is the difference with the greatest impact on the net return where there is a mortgage, and it is worth naming the mechanism precisely rather than leaving it as a general rule.

• Individual: since April 2020, Section 24 prevents interest being deducted from rental income. In its place a 20% tax credit on the interest applies, regardless of the taxpayer's marginal rate. For a higher-band investor that means part of the interest they pay does not reduce their bill.
• Company: Section 24 does not apply to it. Interest is deducted as a business expense against the rental profit, subject to the corporate interest restriction, which only bites above a net interest expense far larger than that of an individual deal and therefore rarely affects a single-asset vehicle.

There are two qualifications worth reviewing case by case. First: if the vehicle is funded by a shareholder loan rather than a market mortgage, deducting that interest has rules of its own. Second: a non-resident company with UK property income has paid corporation tax since April 2020 and falls within that same regime, which changes the analysis against a British company.

If the deal is leveraged, this point alone usually settles the structure.

How the asset passes on

Transferring shares in a company and transferring a registered property are not the same legal act, and they do not carry the same cost, timing or treatment. In long-term family planning, that difference shows.

How several owners come in

If more than one person is involved —partners, family, an investment vehicle— the company provides a framework for governance, entry and exit that joint registered ownership does not. And this is where the analysis can part company with that of an ordinary family company, depending on how it is composed and who participates in it.

How liability is contained

Liability towards tenants, works and third parties stays inside the company and does not reach the owner's personal estate.

And three things it does not do, to get them out of the way

Almost all the misinformation on this subject consists of attributing to the company effects it does not have. Knowing where the limit sits is what allows the tool to be used well.

• It does not reduce Stamp Duty. The 5% additional property and 2% non-residence surcharges apply to a company just the same, and above a certain value additional annual charges on residential property held by companies can come into play.
• It does not take the property out of inheritance tax by itself. Since 6 April 2017, Schedule A1 of the Inheritance Tax Act 1984 provides that shares in a close company are not excluded property to the extent their value derives from UK residential property. Since 6 April 2026 the same rule reaches agricultural property. Commercial property sits outside that mechanism today, but the fact is best read alongside the previous one: the rule has already been widened once.
• It does not make your obligations at home disappear. If your jurisdiction of residence taxes worldwide income or wealth, the shareholding is still an asset to declare.

The 2027 change, which almost nobody has factored in yet

The Autumn Budget 2025 provided that, from April 2027, individual property income tax rates rise by two points in every band: 22%, 42% and 47%. Companies are taxed under a different regime that this rise does not touch.

The comparison between personal and corporate ownership is not the same in 2026 as it will be in 2027, and a decision taken on the old numbers can age badly.

That does not mean the company always wins: there are incorporation, accounting and compliance costs that small deals do not justify, and taking funds out of the company has its own treatment. It means the threshold at which it pays off moves, and is worth recalculating.

The register of overseas entities

If the company acquiring the property is not British, there is an obligation to register on the register of overseas entities and to keep that registration up to date, with information on its beneficial owners. It is not a minor formality: without it, registered dealings with the property can be blocked. It is one of the reasons the choice of the company's jurisdiction is not neutral.

How it is decided in practice

Not by a general rule. The factors that weigh are the size of the deal, whether there is financing and how much, how many owners come in, the holding horizon, the succession intention and —decisively— the client's jurisdiction of tax residence, because the treatment at home can reverse the British conclusion.

It is an afternoon's analysis with the full picture, and an expensive mistake to make after signing. Changing the ownership of a British property already acquired can trigger Stamp Duty all over again.

Related questions

Sources

General information drawn from the official sources listed at the end. It is not tax, legal or financial advice. Acacias Capital Ltd is not authorised or regulated by the FCA.