7 Feb 2025
Limited Company vs Single Name Buy to Let
Owning a buy-to-let property in your sole name versus through a limited company each has its own set of advantages and disadvantages. Here's a breakdown:
Sole Name (Individual Ownership)
Advantages:
- Simplicity: Easier to set up and manage without the need for company accounts or additional legal structures
- Flexibility: Direct control over the property and rental income without corporate constraints
- Lower Initial Costs: No incorporation fees or ongoing compliance costs associated with running a company
Disadvantages:
- Higher Tax Rates: Rental income is taxed at personal income tax rates, which can be as high as 45% for higher rate taxpayers
- Mortgage Interest Relief Restrictions: Full mortgage interest can be offset against rental income, reducing taxable profits
- Personal Liability: Personal assets are at risk if there are legal claims or debts related to the property
Limited Company Ownership
Advantages:
- Tax Efficiency: Rental income is taxed at corporation tax rates (19-25%), which can be lower than personal income tax rates
- Mortgage Interest Relief: Full mortgage interest can be offset against rental income, reducing taxable profits
- Inheritance Tax Planning: Shares in the company can be passed to heirs without incurring stamp duty
- Asset Protection: Limited liability protects personal assets from claims related to the property
Disadvantages:
- Higher Initial Costs: Incorportation fees, ongoing compliance costs, and potential accounting fees
- Complexity: Requires maintaining company accounts, filing annual returns, and adhering to company
- Limited Mortgage Options: Few mortgage products available for limited companies, and interest rates may be higher.
Ultimately, the best choice depends on your individual circumstances, including your tax situation, investment goals, and willingness to manage the administrative responsibilities of a limited company. Consulting with a financial advisor or accountant can help you make the most informed decision.
Recent posts
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
Lloyds boost lending for first-time buyers
5 days ago
Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.
As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more.
The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.
Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.
Nationwide ease their ‘Helping Hand’ mortgage designed to help first-time buyers get onto the property ladder by allowing them to borrow up to six times their income.
Ways to save money over the summer holiday
14 days ago
Keeping the kids entertained over the six-week summer holidays isn’t always easy, especially with the cost-of-living making it even more difficult. Below is a list of fun, inexpensive ideas to do over the break
The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first -time buyers, self-employed, and those borrowing in retirement.
Ever wondered where the most reasonably-priced towns for families to buy are? Property company, Zoopla has identified the top 10 towns for families to live in the UK by looking at the most affordable towns, and how many people are looking in that area.
Increase in zero-deposit mortgages in 2024
18 Jun 2025
There was a 32% increase last year in 100% loan-to-value (LTV) mortgages which are mortgages that require zero deposit. According to a recent report by chartered accountants and business advisers, Lubbock Fine, the reason behind this is buyers simply struggling to save enough for a deposit.
More information
Trusted by
