🏘️ Should I Buy a Buy-to-Let in My Personal Name or Through a Limited Company?

When investing in a buy-to-let (BTL) property, one of the biggest decisions you'll face early on is how to purchase it—in your personal name or through a limited company. The right choice can have a significant impact on your mortgage options, tax liability, and long-term returns.

So, how do you decide?

At Drummonds Finance Group, we advise landlords across Oxford, Bicester, and the UK on smart buy-to-let strategies. Here’s a breakdown of the key differences and considerations to help you make an informed decision.

🧾 Personal Name vs Limited Company – What’s the Difference?

✅ Buying in Your Personal Name

This is the traditional route for many landlords. You purchase the property in your own name and the rental income is treated as part of your personal income for tax purposes.

Pros:

• Simplicity – No need to set up or maintain a company

• Cheaper mortgage options – More lenders and better rates are usually available

• Easier access for first-time landlords – More straightforward underwriting

Cons:

• Income tax – Rental profits are taxed at your personal income tax rate (20%, 40%, or 45%)

• Limited tax relief on mortgage interest – Since 2020, mortgage interest is no longer fully deductible; instead, a basic-rate (20%) tax credit is applied

🏢 Buying Through a Limited Company

This involves setting up a special purpose vehicle (SPV) – typically a limited company registered with Companies House – specifically for owning property.

Pros:

• Full mortgage interest relief – Mortgage interest is fully deductible as a business expense

• Corporation tax savings – Profits are taxed at the lower corporation tax rate (currently 25%)

• Tax-efficient reinvestment – You can leave profits in the company and reinvest them without personal tax

Cons:

• Higher mortgage rates and fees – Limited company mortgages often come with slightly higher costs

• Fewer lender options – Not all lenders offer mortgages to limited companies

• More administration – Annual accounts, company returns, and possibly accountant fees

🔍 What’s Right for You?

This decision depends heavily on your personal circumstances and long-term goals.

💼 Are You a Higher-Rate Taxpayer?

If you’re in the 40% or 45% tax bracket, using a limited company might make more sense because of the tax savings on rental income.

📈 Are You Planning to Grow a Portfolio?

For landlords aiming to acquire multiple properties, a limited company structure can be more efficient for reinvesting profits and scaling up.

🧮 Do You Need the Rental Income Now?

If you rely on rental income for day-to-day living, buying in your personal name may be more suitable. With a company, drawing income means dividends or salary—which can be less efficient tax-wise.

🏦 What About Mortgages?

Mortgage availability differs depending on the structure you choose.

• Personal BTLs have more choice, lower interest rates, and easier criteria.

• Limited company BTLs require more paperwork, and usually have slightly higher interest rates—but may offer better long-term tax efficiency.

At Drummonds Finance Group, we work with both types of investors and have access to a wide range of lenders, including those specialising in limited company buy-to-let mortgages.

🧠 Other Considerations

📝 Capital Gains Tax

Selling a property held in your own name may expose you to capital gains tax (CGT) above your personal allowance. Companies also pay tax on profits, but CGT rules differ—make sure you consult a tax adviser before selling.

📜 Inheritance Planning

Some landlords use limited companies as part of a longer-term inheritance strategy, as shares in a company may be easier to pass on than physical property.

💬 Final Thoughts: Personal Name or Limited Company?

There’s no one-size-fits-all answer. If you’re only planning to buy one or two properties and want things simple, buying in your personal name might be the best route. But if you’re serious about building a portfolio and maximising tax efficiency, setting up a limited company could be the smarter long-term move.

📞 Need Help Deciding?

Whether you’re just starting out or looking to restructure your property portfolio, Drummonds Finance Group is here to help. We’ll explain your options in plain English and guide you to the right mortgage solution—whatever route you choose.

👉 Contact us today for expert advice tailored to your situation.

📍 Serving clients across Oxford, Bicester, and nationwide.