Landlords across the UK are facing a crucial decision in 2025: should I hold my buy-to-let (BTL) properties in a limited company—or keep them in my personal name?
With tax policy changes, rising interest rates, and increasing regulation, the structure of your portfolio could make a significant difference to your profitability and long-term growth.
Here’s what you need to know.
Personal ownership: simple but less tax-efficient
Holding BTL property in your own name is still the most common method, especially for first-time or small-scale landlords.
Advantages:
- Simpler to set up and manage
- Fewer upfront legal and accounting costs
- Access to standard BTL mortgages
Disadvantages in 2025:
- Mortgage interest is no longer deductible (Section 24)
- Income is taxed at your personal rate, which could be 40% or 45%
- No dividend tax allowance (now reduced to just £500 per year)
Limited company ownership: rising in popularity
Incorporating your BTL portfolio means setting up a company that owns and rents out the properties. This is increasingly popular among portfolio landlords and higher-rate taxpayers.
Advantages:
- Full mortgage interest relief available
- Corporation tax is 19% or 25%, depending on profits
- Flexibility to leave profits in the business or reinvest
- Easier to involve business partners, family members, or pension schemes
Disadvantages:
- Upfront costs of incorporation (including potential stamp duty and CGT)
- Mortgage rates are typically higher for limited companies
- Professional accounting services required
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What do the numbers say?
Example (annual rental income: £30,000)
| Structure | Income Tax | Profit After Tax | Mortgage Interest Deductible |
| Personal Ownership | 40% (higher rate) | ~£18,000 | No (limited relief only) |
| Limited Company | 19–25% Corp Tax | ~£22,500–£24,000 | Yes |
Note: Extracting profits via dividends or salary may incur additional tax.
Should I incorporate my existing portfolio?
Possibly—but be careful. If you already own property personally, transferring to a company could trigger:
- Capital Gains Tax
- Stamp Duty Land Tax
- Additional legal and finance fees
However, incorporation relief under Section 162 can eliminate CGT if conditions are met (e.g. running the portfolio as a business, not a passive investment).
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Final advice
- If you’re a basic-rate taxpayer or plan to sell in the short term: personal ownership may still work.
- If you’re a higher-rate taxpayer, planning to grow, and want long-term flexibility: consider the limited company route.
- Either way: get tax advice first. Incorporation is a one-way door and needs to be planned correctly.
