Buying UK property through a limited company can reduce ongoing tax on rental income and, for a portfolio of properties, simplify succession planning. For a single luxury home bought for personal use, it usually costs more overall once the higher rate of stamp duty and the annual ATED charge are factored in. The right structure depends on whether the property will be rented out, occupied by the buyer, or held for long-term capital growth.
Short answer: It depends. A limited company is usually the wrong structure for a single luxury home for personal use, because HMRC charges a 15 percent flat SDLT rate and annual ATED on company-held homes. A company is often the right choice for a rental portfolio. Corporation tax is 19 to 25 percent. Companies House filings add admin.
Individual Versus Company: A Summary Comparison
The table below summarises the key differences for a non-resident buyer choosing between personal ownership and a UK limited company:
| Individual (non-resident) | UK limited company | |
|---|---|---|
| SDLT on purchase | Tiered rates plus 2% non-resident surcharge (and 3% additional-dwelling surcharge where applicable) | 15% flat rate where no relief applies (plus 2% non-resident surcharge); standard tiered rates with relief for genuine rental businesses |
| ATED | Not applicable | Annual charge on properties valued above £500,000; relief available for commercially let property but a return must still be filed |
| Tax on rental income | UK income tax at 20%, 40% or 45% | Corporation tax at 19%–25%; mortgage interest generally fully deductible |
| Tax on sale gain | Non-resident CGT at 18% or 24% for residential property | Corporation tax on the gain at 19%–25% |
| Inheritance tax | UK IHT applies to UK property | UK IHT applies to the value of shares attributable to UK residential property (since April 2017) |
| Admin and compliance | Minimal beyond tax returns | Annual accounts, Companies House filings, ATED returns, and the Overseas Entities register if the company is offshore |
What Changes When a Company Buys Instead of an Individual
A company purchasing UK residential property is charged Stamp Duty Land Tax differently from an individual. Purchases not qualifying for a relief, such as a genuine rental business, are charged at a flat 15 percent rate on the full price rather than the tiered rates an individual pays, and where the company is non-resident a further 2 percent surcharge typically applies on top. Advisers differ slightly on the exact combined figure once ATED liability is also factored in, with some citing an effective rate as high as 19 percent in that scenario, so the precise rate for a specific purchase should always be confirmed with a solicitor before exchange, since SDLT rates and reliefs are revised periodically. See the current stamp duty surcharges for non-resident buyers.
This flat rate exists specifically to discourage buying a single home through a company purely to reduce personal tax exposure. Where the company is genuinely in the business of letting property commercially, reliefs bring the rate back down closer to the standard tiered rates, which is why the intended use of the property is the first question to settle before choosing a structure.
Worked Example: Individual Versus Company Purchase
Take a 3,000,000 pound London property bought by a non-resident buyer with no other UK property. Bought personally, SDLT is calculated on the standard tiered rates plus the 3 percent additional-property surcharge and the 2 percent non-resident surcharge, giving an SDLT bill in the region of 380,000 to 400,000 pounds depending on the exact tier breakdown at the time of purchase.
Bought through a non-resident company with no qualifying relief, SDLT is charged at the flat non-qualifying rate, which produces a materially higher bill, potentially in the region of 510,000 pounds or more once the non-resident surcharge is applied, and the company then also becomes liable for an annual ATED charge for as long as it holds the property. These figures move with current rates and reliefs, and should be confirmed against HMRC’s published bands before a purchase decision is made.
The Ongoing Costs a Company Structure Creates
A company holding UK residential property valued above 500,000 pounds is generally liable for the Annual Tax on Enveloped Dwellings, a banded annual charge based on the property’s value, reassessed periodically. The full ATED bands and current charges are set out here. Relief from ATED is available where the property is let on a genuinely commercial basis to an unconnected party, but a return must still be filed annually even where full relief applies, so the compliance burden does not disappear just because the tax charge does.
The ATED annual charges for the 2024–25 chargeable period are banded by property value as follows (charges are uprated each year, so confirm the current figures with HMRC or your accountant before budgeting):
| Property value | Annual ATED charge (2024–25) |
|---|---|
| More than £500,000 up to £1 million | £4,400 |
| More than £1 million up to £2 million | £9,000 |
| More than £2 million up to £5 million | £18,250 |
| More than £5 million up to £10 million | £36,500 |
| More than £10 million up to £20 million | £73,000 |
| More than £20 million | £145,750 |
On disposal, a company does not pay Capital Gains Tax in the way an individual does. Gains are instead taxed through Corporation Tax, currently 25 percent for larger companies and 19 percent for smaller ones with profits under 50,000 pounds, with a tapered rate in between. Rental profits are taxed the same way, and mortgage interest is generally fully deductible against rental profit for a company, which contrasts with the restricted relief available to individual landlords.
Inheritance Tax No Longer Works as a Reason to Use a Company
Before April 2017, holding UK property through an offshore company was a common way to keep it outside UK Inheritance Tax, because the shares in a foreign company counted as excluded property. That route closed in April 2017, and the value of an offshore company’s shares attributable to UK residential property is now brought back into the IHT charge on a chargeable event such as the owner’s death. The current inheritance tax position for non-resident owners is covered in detail here. Any buyer being advised that a company structure avoids inheritance tax should treat that advice with caution.
The Compliance Step Buyers Often Miss
Since August 2022, any overseas entity that owns UK property has been required to register its beneficial owners on the Register of Overseas Entities at Companies House, and to submit annual updates. This applies whether the entity is a company, foundation, or similar structure, and it sits alongside the tax filings rather than replacing any of them. Failing to register is a criminal offence, and an unregistered overseas entity is also restricted from registering title to the property or dealing with it at the Land Registry, which can hold up a future sale. Buyers who set up an offshore structure some years ago, before this register existed, should check that it is properly registered rather than assuming older arrangements are unaffected.
When a Company Structure Genuinely Makes Sense
A company structure tends to suit a buyer who is building a portfolio of several rental properties, wants to reinvest rental profits at corporation tax rates rather than personal income tax rates, or is bringing in other family members or investors as shareholders for succession planning. It tends not to suit a single luxury home intended mainly for personal use, where the flat SDLT rate and the annual ATED charge usually outweigh the benefits, unless there is a specific reason, such as privacy or liability separation, that makes it worthwhile despite the extra cost. Review the current ATED charges before deciding.
Frequently Asked Questions
Is it cheaper to buy UK property through a company?
Usually not for a single home bought for personal use. The flat SDLT rate for non-qualifying company purchases, combined with the annual ATED charge, typically makes company ownership more expensive than personal ownership unless the property is a genuine rental business.
Do companies pay Capital Gains Tax on UK property?
No. Companies pay Corporation Tax on gains from UK property disposals rather than Capital Gains Tax, currently at rates between 19 and 25 percent depending on the company’s profits.
Does a company structure still avoid UK inheritance tax?
No. Since April 2017, the value of an offshore company’s shares attributable to UK residential property has been brought back into the scope of UK Inheritance Tax.
What is the Register of Overseas Entities?
A Companies House register, in place since August 2022, that requires overseas entities owning UK property to disclose their beneficial owners and submit annual updates. Non-compliance is a criminal offence and can prevent dealings with the property at the Land Registry.
When does a company structure make sense for a UK property purchase?
It tends to suit buyers building a rental portfolio or planning for succession across several family members, rather than a single home bought mainly for personal use.
How much is the ATED charge for a company-owned UK property?
ATED is banded by property value. For the 2024–25 chargeable period, annual charges run from £4,400 for properties valued between £500,000 and £1 million, up to £145,750 for properties over £20 million, with intermediate bands at £9,000, £18,250, £36,500 and £73,000. Charges are uprated each year, and relief is available where the property is let commercially — though a return must still be filed.
Is it better to buy UK property as an individual or through a limited company?
It depends on the intended use. For a single home bought for personal use, individual ownership is usually cheaper because a company faces the 15% flat SDLT rate and annual ATED charges. For a portfolio of rental properties, a company can be more efficient: rental profits are taxed at corporation tax rates (19–25%), mortgage interest is fully deductible, and profits can be reinvested without personal tax.
Can a non-resident buy UK property through an offshore company?
Yes. There are no restrictions preventing a non-resident from using an offshore company to buy UK property. However, the company must register on the Register of Overseas Entities at Companies House, disclose its beneficial owners, and comply with UK tax rules including the 15% SDLT rate (where no relief applies), ATED, and corporation tax on rental income and gains.
What rules apply to non-residents buying UK property through an offshore company?
The key rules are: registration of beneficial owners on the Register of Overseas Entities (since August 2022, with annual updates); SDLT at the 15% flat rate for non-qualifying purchases plus the 2% non-resident surcharge; annual ATED charges for properties over £500,000; corporation tax on rental profits and gains; and UK inheritance tax on the value attributable to UK residential property. Non-compliance with the register is a criminal offence and can block dealings at the Land Registry.
Do I still pay ATED if my company lets the property commercially?
Where the property is let on a genuinely commercial basis to an unconnected third party, relief from the ATED charge is available — but you must still file an ATED return each year to claim it. The relief does not remove the compliance obligation, and HMRC can challenge arrangements that do not meet the commercial-letting conditions.
Can a limited company get a UK mortgage to buy property?
Yes, through specialist buy-to-let or commercial lenders, though the market is narrower than for individuals. Lenders typically require a larger deposit (often 25–40%), charge higher rates, and will assess the company’s directors and the property’s rental coverage. Non-resident companies face additional scrutiny and fewer lender options, so a specialist broker is advisable.
Written and reviewed by the My Luxury Property editorial team, who research premium property markets and ownership structures across the UK and internationally. This article is for general information only and is not tax or legal advice; see our disclaimer for details. Rates, reliefs and thresholds are revised periodically and should always be confirmed with a solicitor or accountant before a purchase. Considering a company purchase for a specific property? Get in touch with us here.