Limited Company vs Personal Property Investment (UK 2025): The Smart Investor’s Guide
Property investment continues to be one of the most lucrative wealth-building strategies in the UK, but how you structure your investments has a significant impact on your tax efficiency, cash flow, and long-term returns.
One of the most common questions we receive at O. Johnston & Co is:
“Should I invest in property through a limited company or in my personal name?”
The answer isn’t one-size-fits-all. It depends on your investment goals, tax bracket, and portfolio growth strategy. In this guide, we break down the pros, cons, and strategic considerations so you can make smarter decisions.
1. The Big Picture: Why Structure Matters
Before diving into tax rates and cost comparisons, it’s important to understand why the right structure matters:
It impacts how much tax you pay on rental income and capital gains
It affects how lenders view you and what mortgage products you can access
It determines how easily you can scale your portfolio over time
It influences your inheritance and exit strategies
At O. Johnston & Co, we work with clients to structure portfolios in a way that minimises tax leakage and maximises cash flow - so your capital works harder from day one.
2. Investing in Your Personal Name
For many first-time investors, buying property as an individual seems like the simplest approach. However, recent tax reforms have made it less attractive for higher-rate taxpayers.
Advantages of Personal Investment:
Lower initial setup costs – No need to register a company
Access to wider mortgage options – More lenders cater to personal buyers
Simpler accounting – Fewer reporting and compliance requirements
Disadvantages of Personal Investment:
Section 24 impact – You can no longer fully deduct mortgage interest from rental income, which reduces profits for higher earners
Higher income tax rates – Rental profits are taxed at up to 45% for additional-rate taxpayers
Capital gains exposure – Up to 28% CGT when you sell investment properties
Best suited for:
Smaller landlords earning below the basic-rate tax threshold or those planning to hold one or two properties without scaling aggressively.
3. Investing Through a Limited Company
For serious investors looking to build a scalable, tax-efficient portfolio, a limited company structure often provides significant benefits.
Advantages of Using a Limited Company:
Lower tax rates – Corporation tax is 19%-25%, significantly lower than personal income tax for high earners
Full mortgage interest relief – Unlike personal ownership, mortgage interest remains fully deductible
Easier portfolio scaling – Retained profits can be reinvested without incurring personal tax
Inheritance tax planning – Shares can be transferred more efficiently than individual properties
Disadvantages of Using a Limited Company:
Higher setup and admin costs – Requires company formation and annual accounts
Fewer mortgage products – Limited company buy-to-let mortgages tend to have slightly higher rates
Dividend taxation – If you extract profits, you’ll pay additional dividend tax
Best suited for:
Professional landlords, high-income earners, and investors seeking to build multi-property portfolios with long-term wealth preservation in mind.
4. Tax Comparison: Limited Company vs Personal Investment (2025)
FactorPersonal NameLimited CompanyRental Income TaxUp to 45%19% - 25%Mortgage Interest ReliefRestrictedFully DeductibleCapital Gains Tax (CGT)Up to 28%19%-25%Dividend TaxN/A8.75% – 39.35%Setup CostsNone~£100-£200Accounting CostsMinimalHigher
5. Strategic Insights from O. Johnston & Co
At O. Johnston & Co, we work exclusively with serious investors who want to:
Build hands-free property portfolios
Optimise tax efficiency
Secure off-market, high-yield deals
Achieve capital deployment and return within 12 months
For many of our clients, the limited company route offers the most efficient structure - but every investor’s situation is unique. We work alongside specialist tax advisors to ensure that your investment strategy is fully aligned with your financial goals.
6. Final Thoughts: Which Option Is Best for You?
If you’re:
A basic-rate taxpayer with one or two properties → Personal ownership may suffice
A higher-rate taxpayer or planning to scale rapidly → A limited company often provides far greater tax advantages and flexibility
The smartest approach is to take a strategic, data-driven view—and that’s where we come in.
At O. Johnston & Co, we don’t just find properties—we build tax-efficient, income-generating portfolios tailored to your growth goals.
