Should you hold investment property personally or through a company?

As tax rules tighten and compliance costs rise, landlords are rethinking how they hold property. Should you own personally, or incorporate? The answer depends on your goals, tax bracket, and long-term strategy.

Personal ownership: simplicity with tax trade-offs

Holding property personally avoids the admin burden of running a company. But for higher-rate taxpayers, it can be costly:

• Income tax on rental profits at up to 45%

• No full relief for mortgage interest

• Capital Gains Tax (CGT) on sale at 18–28%

• Limited succession planning options

If you’re earning rental income above £50k, personal ownership may be less efficient.

Company ownership: tax efficiency with complexity

Incorporating can offer strategic advantages:

• Corporation Tax at 19–25%

• Full relief for mortgage interest

• Flexible profit extraction via dividends

• Easier succession planning and ownership structuring

• Limited liability protection

However, you’ll face:

• Dividend tax when extracting profits

• More admin and compliance

• CGT and Stamp Duty Land Tax (SDLT) on incorporation

Incorporation relief may defer CGT if your portfolio qualifies as a business, typically requiring active management and 20+ hours per week.

What’s changing and why it matters

Landlords are under pressure:

• Mortgage costs are rising

• EPC rules will require upgrades (C rating by 2027, B by 2030)

• FHL regime ends soon

• Insurance premiums are spiking

• Private landlords are exiting the market

These shifts make structure more important than ever.

At BlueFox Accounting, we help landlords assess whether incorporation suits their goals. We model tax outcomes, flag compliance risks, and guide you through the transition or help you optimise personal ownership.

Note, with the upcoming budget later this month, the above information is subject to change!