Since Section 24, many landlords ask whether owning property in a limited company would pay less tax. The answer depends on your income, your mortgage and how you take money out of the company.
This calculator compares the yearly tax on rental property held personally, with Section 24, against holding it in a company, paying corporation tax and then dividends, and shows the costs of switching.
| Rent less running costs | £17,000 |
|---|---|
| Mortgage interest | £8,000 |
| Personally (salary £40,000) | About £3,146 tax on the rental profit |
| In a company | Interest is deductible: £9,000 profit, £1,710 corporation tax at 19% |
| But | Dividend tax applies when you take the money out |
Get this tool
This page is a free preview with example figures. Buy it once for £19 to use it with your own properties. No subscription, no per-property fees.
Or get every tool with the Founder’s Pass, £199. One-off price, secure checkout by Stripe.
Not always. A company can deduct mortgage interest in full and pays corporation tax, but taking money out as dividends is taxed again, and mortgages can cost more. It tends to suit higher-rate taxpayers who leave profits in the company.
Moving existing property into a company is normally treated as a sale at market value, so there can be Capital Gains Tax and stamp duty, plus legal and mortgage costs. Some reliefs can apply in particular cases.
19% on profits up to £50,000, 25% above £250,000, with marginal relief in between.
Education, not advice. Rules change and depend on your circumstances. Check GOV.UK and speak to a qualified adviser before you act.