RK INVESTING
With higher income tax surcharges on rental income and ongoing corporation tax changes, the debate between owning property personally or through a limited company has never been more important for UK landlords in 2026.
1. Income Tax vs Corporation Tax on Rental Profits
Private landlords now face increased income tax pressure on rental income, while companies pay corporation tax on profits instead. For many higher-rate investors, a company structure can still deliver a lower overall tax rate, especially when profits are retained for growth.
Tip: Model your cashflow over at least five years, including potential rate changes and planned drawings, before deciding whether to incorporate.
2. Section 24, Mortgage Interest and Deductibility
Section 24 continues to restrict interest relief for individual landlords, pushing many towards limited company ownership where mortgage interest is generally a fully deductible business expense. The right structure can transform a highly leveraged portfolio’s after-tax return.
Tip: Compare post-tax yields on identical properties held personally vs via a company, including the impact of the main and small profits rates of corporation tax.
3. Exit Planning, CGT and Corporation Tax on Gains
Selling a personally owned property triggers capital gains tax at residential rates, while a company sale is subject to corporation tax with further tax considerations when extracting funds. Your long-term exit strategy should influence how you structure today.
Tip: Consider whether you aim to recycle capital within a company long-term or extract profits, as this can tilt the choice between company and individual ownership.
Conclusion
There is no one-size-fits-all answer. The best structure depends on your current portfolio, borrowing levels, future plans, and wider tax position. Regular reviews with professional advice are essential to stay aligned with changing rules.
RK Investing helps investors model and compare individual vs company structures so you can make informed decisions for 2026 and beyond.