Should You Use a Limited Company for Buy-to-Let? A 16-Year Expert Perspective

In my 16 and a half years as a Chartered Accountant (wisaccountancy.co.uk) and after overseeing more than 4,000 mortgage applications, I’ve seen the UK property landscape shift dramatically. For the modern landlord, property investment is no longer just about finding the right house; it is about choosing the right legal and tax structure.

At WIS Mortgages, the question I, Ifthikar Mohamed, am asked most often is: “Should I buy in my own name or through a Limited Company?” While personal ownership used to be the default, tax changes like Section 24 and the upcoming Making Tax Digital (MTD) 2026 requirements have changed the math for almost everyone.

Key Takeaways for UK Investors

• Tax Efficiency: Higher-rate taxpayers can often save significantly by using a Limited Company (SPV) to reclaim full mortgage interest relief.
• Lender Preference: Banks prefer “clean” Special Purpose Vehicles (SPVs) over trading companies for better security.
• Legacy Planning: Companies offer superior structures for passing wealth to children via alphabet shares.
• The Break-Even Point: You must balance higher mortgage rates against tax savings to ensure the structure actually puts more money in your pocket.

Comparing Structures: Individual vs. Limited Company (SPV)

Export to Sheets

The Power of the “Clean” SPV

Lenders in the UK mortgage market vastly prefer Special Purpose Vehicles (SPVs)—companies set up exclusively for property investment—over standard trading companies. A trading company carries operational risks, like VAT liabilities or employee claims, which makes lenders nervous.

By using an SPV, you ring-fence your property assets. If you have surplus cash in a trading business, we often recommend an intercompany loan from your trading business to your new SPV. This keeps your structure “clean” and makes you far more attractive to specialist lenders.

Is the Higher Mortgage Rate Worth It?

As a broker who has handled thousands of applications, I’ll be the first to tell you: Limited Company mortgage rates are higher. However, as an accountant, I look at the Net Profit.

If Section 24 means you are paying tax on “phantom profits” in your personal name, you might be losing more to HMRC than you would spend on the higher interest rate of an SPV mortgage. We always perform a Break-Even Analysis for our clients to ensure the structure makes financial sense.

Succession and Future-Proofing

A Limited Company isn’t just a tax shield; it’s a legacy tool. Passing a property to your children in your personal name can trigger immediate Stamp Duty and Capital Gains tax. However, gifting shares in a company, or using different share classes (Alphabet Shares), allows you to distribute income and ownership far more efficiently.

Watch My Deep-Dive Video

I recently recorded a full breakdown of these strategies for our YouTube channel. If you want to see the numbers in action, you can watch it here:

Watch: Should You Use a Limited Company for Buy-to-Let? UK Mortgage & Tax Guide

Frequently Asked Questions (FAQ)

1. Can I use my existing trading company to buy property?

It is possible, but difficult. Most lenders prefer a dedicated SPV. We usually suggest setting up a new SPV and using an intercompany loan from your trading business.

2. What are the hidden costs of a Limited Company?

You need to budget for professional accountancy fees, Corporation Tax filings, and slightly higher legal fees during the mortgage process.

3. Does being a Chartered Accountant help with mortgages?

Absolutely. Lenders view “Professional Landlords” with organized finances as lower risk, which can often help during the underwriting process for complex portfolios.

4. How does Making Tax Digital (MTD) 2026 affect me?

MTD will require more frequent digital reporting. A Limited Company structure naturally encourages the digital bookkeeping required to stay compliant with these new HMRC rules.

Ready to Secure Your Next Investment?

Choosing the wrong structure can cost you thousands in unnecessary tax or high-interest debt. With over 16 years of accountancy experience and 4,000+ mortgage applications under our belt, WIS Mortgages is uniquely positioned to help you get it right the first time.

Contact WIS Mortgages today on 02030111986 for a tailored consultation

FCA Warnings:

Your home or property may be repossessed if you do not keep up repayments on your mortgage.