Limited company vs personal name.

The most-asked question in buy-to-let, and the honest answer is it depends on your tax band and your plan. Here’s the machinery so the trade-offs make sense — this is orientation, not tax advice.

Section 24: why companies took over

Individuals can no longer deduct mortgage interest from rental profits — they get a basic-rate (20%) credit instead. For a higher-rate taxpayer with meaningful gearing, that means paying tax on profit that doesn’t exist. A limited company deducts interest in fulland pays corporation tax on what’s genuinely left. The more leveraged you are and the higher your income-tax band, the harder Section 24 bites — which is why most new portfolio purchases now complete in companies.

The lending difference: 125% vs 145%

Less famous but often decisive: lenders stress-test a limited company at a 125% ICR, but a higher-rate individual at 145% — so the same rent supports roughly 16% more borrowing in a company. Try it both ways in the ICR calculator. Company mortgage rates run slightly higher, but the gap has narrowed.

Where personal name still wins

If you’re a basic-rate taxpayer, lightly geared, or need the rent as income, personal ownership can be simpler and cheaper: money in a company is only yours after dividend or salary tax on the way out, and a company files accounts every year. Companies also get no CGT annual exemption, and buying residential property over £500k through a company can trigger a flat higher SDLT rate unless a rental-business relief applies.

The classic shapes

Building and reinvesting? The company compounds: full interest relief, corporation-tax rates, profits rolled into the next deposit without extraction tax. Supplementing income today? Personal can net you more in the hand. Already own a portfolio personally? Be careful — moving it into a company is a disposal at market value (CGT) and a purchase (SDLT) unless specific reliefs apply. That one genuinely needs an accountant.

Model both before you decide

The structure changes the financing, not just the tax: every financing screen in the Deal Shaper lets you switch the borrower between individual (basic or higher rate) and company, and the stress test, maximum loan and cashflow update live.