Bolton Business Finance is an independent commercial finance broker that arranges buy to let mortgages for limited companies and portfolio landlords, and this page works out whether a property is better bought in your own name or through a company.
This personal vs limited company buy to let calculator compares the two routes side by side on the 2027/28 rules: income tax on rent at the new property rates, corporation tax and dividend tax, how much each route can borrow, the stamp duty, and what you are left with when you sell. It covers residential, commercial and mixed use property in all four UK nations, with up to four owners.
Written by Marcus Wright, owner and founder of Bolton Business Finance Ltd, in financial services since 2008 and a commercial finance broker since 2019. Last reviewed October 2026.
The short version
- From 6 April 2027, rent received in your own name is taxed at 22%, 42% or 47%, and residential mortgage interest only earns a 22% tax credit.
- A limited company deducts all of its mortgage interest and pays corporation tax at 19% to 25% on what is left.
- Taking that profit out as dividends costs 10.75%, 35.75% or 39.35% on top, so the company route is strongest when the profit stays in the company.
- Higher and additional rate taxpayers buying residential property with a mortgage usually keep more through a company. Basic rate taxpayers who need every pound of the income usually do not.
- Lenders typically test company rent at 125% cover, against 145% for a higher rate taxpayer buying personally, so a company can often borrow more on the same rent.
- Stamp duty is the same both ways for anyone who already owns a home, because a company always pays the higher rates.
- Commercial property has no interest restriction in either route, so the choice there comes down to income tax against corporation tax.
Personal vs limited company buy to let calculator
Compares buying one property in your own name with buying it through a new limited company. Residential, commercial or mixed use, anywhere in the UK, one to four owners. Nothing is sent anywhere and nothing is stored.
Start with an example, or enter your own figures
Your figures
Each year
In your own name
Through a limited company
What is corporation tax?
The tax a company pays on its profit: 19% on profits up to £50,000, 25% on profits over £250,000 and a sliding rate in between. Profit left in the company has only had corporation tax taken off. Dividends you take out are then taxed on you as well.
What is a director loan?
Instead of buying shares, you lend the company the deposit and buying costs. The company pays you back out of its profit, and those repayments are not taxed because it is your own money coming back. Once the loan is repaid, money you take out is normally a dividend and is taxed.
Each owner
How much you could borrow
What is rental cover?
Lenders check that the rent comfortably covers the mortgage interest. At 125%, the yearly rent must be at least 1.25 times the interest worked out at the stress rate. Higher rate taxpayers borrowing in their own name are usually tested at 145%, because more of their rent goes in tax.
What is a stress rate?
The interest rate the lender uses for the rental cover test. On a five year fix it is usually the rate you pay. On a shorter fix lenders use a higher figure, in case rates have risen when the deal ends.
What is loan to value?
The mortgage as a share of the property value. At 75%, a £200,000 property supports a mortgage of up to £150,000 and you put in the other £50,000.
Cash needed upfront
Why it came out this way
Figures you entered
Figures are estimates based on the details you entered and the tax rules as we understand them for the tax year chosen, rounded to the nearest pound. They are an illustration only, not tax advice, not a quote and not an offer of finance, and no liability is accepted for any error or omission. Take advice from an accountant or tax adviser before you decide how to buy.
On this page
- The calculator
- What changed in 2026 and 2027
- How lenders decide what each route can borrow
- When your own name comes out ahead
- When a company comes out ahead
- Commercial property
- Mixed use property
- Beyond the tax
- What a company can claim
- Running a property company
- Scotland and Wales
- What the calculator does not cover
- FAQ
- Talk to us
| Item | Own name | Limited company |
|---|---|---|
| Tax on rental profit | 22%, 42% or 47% from April 2027, after the personal allowance | Corporation tax at 19% up to £50,000 of profit and 25% above £250,000, with marginal relief between |
| Residential mortgage interest | Not deducted. A tax credit at 22% instead, 20% before April 2027 | Deducted in full before tax |
| Getting the money out | Yours once income tax is paid | Dividends taxed at 10.75%, 35.75% or 39.35% above a £500 allowance, or a director loan repaid tax-free |
| Stamp duty on a home | Higher rates if any buyer already owns a home | Higher rates on every residential purchase |
| Typical rental cover | 125% for basic rate, 145% for higher rate | 125% |
| Mortgage pricing | The widest choice of lenders | Fewer lenders, rates typically 0.20% to 0.40% higher in our experience |
| Tax on a sale | Capital gains tax at 18% or 24% after £3,000 each | Corporation tax on the gain, then dividend tax to take it out |
| Admin | Self assessment, plus Making Tax Digital above the income threshold | Annual accounts, a corporation tax return and a confirmation statement |
What changed for landlords in 2026 and 2027
The answer to own name or company moved twice in twelve months. Dividend tax rose by 2 percentage points in April 2026, to 10.75% at the basic rate and 35.75% at the higher rate, with the additional rate left at 39.35%. That made taking money out of a company more expensive.
From 6 April 2027, rent earned in your own name gets its own income tax rates of 22%, 42% and 47%, two points above the rates on wages. The tax credit for residential mortgage interest rises from 20% to 22% to match. Your personal allowance is also set against salary, pension and trading income first, so more of the rent lands in the higher property bands. Companies are not touched by either change. The detail is in the policy paper on changes to tax rates for property, savings and dividend income, published on GOV.UK on 26 November 2025.
None of this replaces the restriction that started the debate. Since April 2020, individuals have not been able to deduct residential mortgage interest from rent at all, under the rule usually called section 24 after the Finance (No. 2) Act 2015 that introduced it. They get a basic rate credit instead, which costs a higher rate taxpayer most of the relief.
Income tax thresholds, including the £12,570 personal allowance and the £50,270 higher rate threshold, are frozen until April 2031. Every rent rise in that period lands on the same bands, which pulls more landlords into higher rate tax on their rental profit. The calculator defaults to 2027/28, and you can switch it to 2026/27 to see the current year.
How lenders decide what each route can borrow
Buy to let lenders cap the loan at the lower of two tests: a maximum loan to value, and a rental cover test that the rent has to pass at a stressed interest rate. The routes usually differ on the second test, not the first.
Most lenders want the rent to cover the stressed interest by 125% for a limited company and for a basic rate taxpayer buying personally, but by 145% if the borrower pays higher rate tax, because more of their rent goes in tax. This is the interest cover ratio. On £15,000 of annual rent, a higher rate borrower tested at 145% and a 5.30% stress rate supports about £195,000. A company tested at 125% and 5.60% supports about £214,000, even at the higher rate.
The stress rate comes from the Prudential Regulation Authority supervisory statement SS13/16, published on the Bank of England website. Lenders test at the higher of 5.5% and the pay rate plus 2%, unless the rate is fixed for five years or more, when they can test at the pay rate. That is why a five year fix often borrows more than a two year fix on the same rent.
Loan to value is similar both ways, typically up to 75% on residential, with some lenders on our panel going to 80% for companies and portfolio landlords. Our buy to let mortgage broker page covers lender appetite in more detail, and our guide to the minimum buy to let deposit covers what lenders expect you to put in. Directors of a borrowing company will normally be asked for a personal guarantee, so a company does not take the debt off your shoulders.
When buying in your own name comes out ahead
Your own name usually comes out ahead when you are a basic rate taxpayer, you need the income every year, and the mortgage is small next to the rent. A basic rate taxpayer pays 22% on rental profit from April 2027 and gets 22% back on the interest, so the interest restriction costs them nothing. Through a company they would pay corporation tax at 19%, then 10.75% dividend tax on what they take out, plus the accounts, which leaves less in hand.
Low borrowing narrows the gap as well. The restriction only bites where there is interest to restrict, so a cash buyer, or one at 40% loan to value, gains far less from a company than a buyer at 75%.
Selling is simpler too. Each owner gets a £3,000 annual exempt amount and pays capital gains tax at 18% or 24% on the rest. A company pays corporation tax on the gain and then dividend tax to get the money out, which can cost more on a short hold. And more lenders lend to individuals than to companies, with pricing that is usually a little lower.
When a limited company comes out ahead
A company usually comes out ahead for higher and additional rate taxpayers buying residential property with a mortgage, especially where the profit can stay in the company to fund the next purchase. A higher rate taxpayer pays 42% on rent in their own name from April 2027 but only gets 22% back on the interest.
The calculator defaults show the effect. A £250,000 house let at £1,250 a month, with £3,000 of costs and a 75% mortgage at 5.30%, leaves a higher rate taxpayer £791 a year out of pocket after tax in their own name. The same property in a company, at 5.60% and with £400 a year for accounts and filing, leaves £891 in the company after corporation tax, a gap of £1,682 a year.
The gap grows when the profit stays in, because the next deposit comes from money that has only paid corporation tax. That is why portfolio landlords building over a decade tend to buy through a company, usually an SPV set up only to hold property.
The money you put in can also come back tax-free. If you lend the deposit, stamp duty and fees to the company rather than buying shares with them, the company can repay that loan out of its profits with no further tax on you. The calculator shows how many years that takes. A company can also pay employer pension contributions for its directors and deduct them, though a large contribution for a director who does little work in the company may be challenged by HMRC.
Commercial property works differently
The interest restriction applies only to residential property. On a shop, office, industrial unit or other commercial building, mortgage interest is deducted in full whether you own it personally or through a company.
Stamp duty is the same both ways. In England and Northern Ireland, commercial property pays the non-residential rates of 0% up to £150,000, 2% to £250,000 and 5% above, with no surcharge for companies or for owning other property. Our commercial stamp duty calculator works through the figures. Wales and Scotland have their own non-residential bands, which the calculator above applies.
Lenders apply a similar cover test to both routes, so borrowing rarely separates them. What is left is income tax against corporation tax plus dividend tax. A higher rate taxpayer reinvesting the profit can still do better through a company, while a basic rate taxpayer drawing the income usually does better in their own name.
There is a third route the calculator does not model. A business owner can buy commercial premises through a SIPP or SSAS pension scheme, where the rent is paid into the pension and gains inside it are free of capital gains tax. It suits trading businesses buying their own premises and needs a pension specialist alongside the lender. Our commercial mortgage broker page covers lending on commercial property, and our commercial mortgage affordability calculator shows how much a property can borrow on its rent.
Mixed use property and the residential share
A shop with a flat above it is mixed use, and the interest is split for income tax. In your own name, the part of the interest that funds the flat is restricted to the 22% credit, and the rest is deducted in full. In a company all of it is deducted. The calculator uses one residential share for the rent, the interest and the value.
For stamp duty, mixed use usually helps. In England and Northern Ireland the whole price pays the non-residential rates, with no surcharge. Wales treats mixed use the same way for land transaction tax, as the Welsh Revenue Authority confirms in its guidance on GOV.WALES.
Scotland is the exception. Revenue Scotland treats a mixed purchase as non-residential for land and buildings transaction tax, but the 8% additional dwelling supplement can still apply to the price of the flat where the buyer is a company or already owns a home and the dwelling part is £40,000 or more. That is set out in its guidance note LBTT4011, and the calculator adds it.
Lenders usually treat mixed use as commercial lending, at around 70% loan to value and on a commercial cover test. Our semi commercial mortgages page covers how lenders look at these properties.
Beyond the tax: liability, ownership and succession
Tax drives most of the decision, but four other things matter, and none of them is in the calculator.
Limited liability, up to a point
A company's debts are its own, so in principle the owners' personal assets are protected. In practice almost every buy to let lender takes personal guarantees from the directors, so the mortgage is still yours if the company cannot pay. The protection is real for other liabilities, such as a claim from a tenant or a contractor.
Splitting ownership
Shares are easier to divide than property. A company can bring in a partner or an investor by issuing or transferring shares, and can change who owns what without changing the name on the title, although the lender will want to know. A sale of shares pays stamp duty at 0.5% of the price, far less than stamp duty on the property itself.
The limits on splitting income
Using shares to move income to a spouse, civil partner or child is policed by the settlements rules. Ordinary shares given outright to a spouse are usually fine. Different share classes, dividend waivers and arrangements where one person gives up income for another can see the income taxed back on the giver. For a child under 18, income over £100 a year from a parent's gift is taxed as the parent's. New shareholders may also be asked for personal guarantees.
Passing it on
Shares can be given away gradually, a few percent at a time, which is hard to do with a single property. Gifts of shares can still carry capital gains tax and inheritance tax, including the seven year rule on gifts, and a company that holds let property does not normally qualify for business relief. Bring in an accountant or solicitor from the start.
What a company can claim that you cannot
The main difference is residential mortgage interest. A company deducts all of it, while in your own name it earns a 22% credit from April 2027. Arrangement fees and other finance costs follow the same rule.
A company can also deduct interest it pays you on a director loan at a commercial rate, and employer pension contributions that pass the wholly and exclusively test. Interest you receive is taxed on you as savings income, and the company must deduct 20% tax from it and report it to HMRC on form CT61.
Both routes claim the same running costs: letting agent fees, insurance, repairs, service charges and ground rent, accountancy, and replacing furniture and appliances in a furnished let. Neither can deduct the purchase price, improvements or the stamp duty from the rent. Those are added to the cost of the property when it is sold.
What it takes to run a property company
A limited company is cheap to form but has to be run properly every year. The calculator allows £100 to set it up, which is the Companies House online incorporation fee from 1 February 2026 as listed on GOV.UK, and £400 a year for accounts and filing. You can change both.
- Annual accounts filed at Companies House and a corporation tax return filed with HMRC.
- A confirmation statement to Companies House each year, which costs £50 to file online.
- Identity verification with Companies House for every director and person with significant control.
- A separate business bank account, which lenders will want the rent paid into.
- A narrower choice of mortgage lenders, which matters most on unusual property.
Owning in your own name has its own admin. Making Tax Digital for Income Tax applies to landlords and sole traders with qualifying income over £50,000 from April 2026 and over £30,000 from April 2027, with quarterly updates sent to HMRC through compatible software. Companies are outside it.
Scotland and Wales
Two separate rules decide the tax. Income tax depends on where each owner lives, and transaction tax depends on where the property is. A Scottish taxpayer buying in Manchester pays Scottish income tax on the rent and stamp duty land tax on the purchase, and the calculator handles each owner separately.
Scottish income tax has six bands in 2026/27, from 19% to 48%, with the 42% higher rate starting at £43,663. Scotland and Wales will be able to set their own rates on property income, but at October 2026 neither has confirmed its rates for 2027/28. The calculator lets you assume they match the UK 2p rise or stay where they are. The interest credit stays at the UK rate either way.
In Scotland, a company or an owner who already has a home pays the 8% additional dwelling supplement on a residential purchase, on top of land and buildings transaction tax. In Wales, the same buyers pay the higher residential rates of land transaction tax, which start at 5% on the first £180,000.
What the calculator does not cover
The calculator compares a single new purchase on clean figures. It leaves out:
- Moving property you already own into a company, which is a sale at market value with capital gains tax and stamp duty unless incorporation relief applies to a genuine property business.
- Furnished holiday lets, which lost their separate tax treatment in April 2025.
- Owners who are not UK resident, and companies controlled from outside the UK.
- Other companies you control, which share the corporation tax thresholds.
- Inheritance tax and the timing of tax payments.
- Remortgaging during the hold, changes in interest rates and refinancing costs.
- Your other tax reliefs, pension contributions and gift aid, which change your bands.
For any of those, treat the figures as a starting point for a conversation with your accountant.
Business purpose only
Bolton Business Finance arranges buy to let mortgages for limited companies and for investor landlords borrowing for business purposes, and commercial mortgages. We do not arrange consumer buy to let, such as letting out a former home or an inherited property, or regulated residential mortgages. If the property is or will be lived in by you or a close family member, it needs a regulated mortgage from an FCA authorised firm.
Personal vs limited company buy to let FAQ
Is it cheaper to buy a buy to let property through a limited company?
For higher and additional rate taxpayers with a mortgage it often is, because a company deducts all of its mortgage interest while an individual only gets a 22% tax credit on residential interest from April 2027. For basic rate taxpayers who take all the profit as income, owning in their own name usually leaves more, because corporation tax plus dividend tax costs more than income tax.
How much tax does a limited company pay on rental profit?
A company pays corporation tax of 19% on profits up to £50,000 and 25% on profits above £250,000, with marginal relief in between. Mortgage interest is deducted in full first. Any profit then paid to shareholders as dividends is taxed again at 10.75%, 35.75% or 39.35% above a £500 dividend allowance, depending on their other income.
Can I borrow more through a limited company?
Often, yes, on the same rent. Most lenders test company borrowing at 125% rental cover, while a higher rate taxpayer buying in their own name is usually tested at 145%, because more of their rent goes in tax. Company mortgage rates are typically a little higher, which works the other way, so the gap depends on the deal and the stress rate.
Does a limited company protect me if the mortgage is not paid?
Not usually. Almost every buy to let lender asks the directors of a property company to give personal guarantees, so they remain liable for the mortgage if the company cannot pay it. A company does separate the business from your personal assets for other liabilities, such as claims from tenants or contractors, but it should not be relied on to remove the mortgage risk.
Is stamp duty higher for a limited company?
Only if you would otherwise pay standard rates. A company always pays the higher rates on a residential purchase, which in England and Northern Ireland means 5% on top of standard stamp duty land tax. An individual who already owns a home pays the same surcharge, so for most landlords the stamp duty is identical either way. Commercial property pays the same rates in both routes.
Do the April 2027 property income tax rates apply to limited companies?
No. The new property income rates of 22%, 42% and 47% from 6 April 2027 apply to individuals who receive rent in their own name, including partnerships of individuals. Companies pay corporation tax on rental profit instead, at 19% to 25%, and are not affected. Shareholders are only affected through dividend tax, which rose by 2 percentage points in April 2026.
Can I move a property I already own into a limited company?
You can, but it is treated as a sale to the company at market value. That normally means capital gains tax on any gain, stamp duty land tax for the company on the full value and a new mortgage. Incorporation relief can defer the gain where there is a genuine property business rather than a single investment. The calculator covers new purchases only.
How do I take money out of a property company?
The usual ways are repaying a director loan, paying dividends, paying interest on a director loan and making employer pension contributions. Repaying money you lent the company is tax-free. Dividends are taxed at 10.75%, 35.75% or 39.35% above a £500 allowance. Loan interest is taxed as savings income, and pension contributions are deductible if they pass the wholly and exclusively test.
Talk to us about the mortgage
Get both routes priced
Run the calculator, then send us the property and who will own it. We will come back, usually within 24 hours, with what lenders will actually offer in your own name and through a company, with the rates and fees, so you can take real numbers to your accountant.
About the author
Marcus Wright is the owner and founder of Bolton Business Finance Ltd. He has worked in financial services since 2008, beginning his career at Santander, and has been a commercial finance broker since March 2019.
He founded Bolton Business Finance in 2020 to give businesses access to the whole lending market rather than one bank's own product range. The firm is a member of the National Association of Commercial Finance Brokers and works with a panel of 135+ lenders.
Marcus arranges commercial mortgages, bridging, development finance, business loans, asset finance, invoice finance and merchant cash advances. Call 0161 546 9128.
The calculator on this page is an illustration only and is not tax advice. Tax rules change and the right structure depends on your full circumstances, so take advice from an accountant or tax adviser before deciding how to buy. Bolton Business Finance Ltd is an independent commercial finance brokerage, not a lender. We are not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. We arrange non-regulated buy to let mortgages for limited companies and investor landlords, and commercial mortgages. We do not arrange consumer buy to let or regulated residential mortgages. All lending is for business purposes only. Nothing on this page is a quotation or an offer of finance, and all facilities are subject to status, lender criteria and valuation. Your property may be repossessed if you do not keep up repayments on a mortgage secured on it. Registered address: Westgate House, 1 Westgate Avenue, Bolton, Greater Manchester, BL1 4RF. Company number 12495909.