Buying personally or through a limited company?

A decision guide for Scottish landlords and investors weighing up the two routes — with the tax, mortgage, and admin differences that actually matter.

LBTT & ADS calculator Mortgage calculator Buy-to-let affordability

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The quick answer Tax treatment compared Mortgage availability and rates LBTT & ADS differences Admin and ongoing costs Who each route tends to suit

The quick answer

There's no single right answer — it depends on your tax band, how many properties you plan to hold, and what you intend to do with the rental profit. As a general pattern:

Personal tends to suit

Basic-rate taxpayers, one or two properties, plans to sell within a few years

Limited company tends to suit

Higher-rate taxpayers, growing portfolios, plans to hold long-term or reinvest profit

Tax treatment compared

This is usually the deciding factor. Since 2017's Section 24 changes, personal landlords can no longer deduct mortgage interest before working out their tax bill — they only get a 20% tax credit instead, regardless of their actual tax rate. Companies were never affected by this rule.

Income tax on rental profit

Personal: taxed at your income tax rate (up to 47% in Scotland) with only a 20% credit on mortgage interest. Company: corporation tax at 19-25% on net profit, after deducting mortgage interest in full.

Capital gains when you sell

Personal: Capital Gains Tax at 18-24%, with a £3,000 annual tax-free allowance. Company: no CGT allowance — the gain is added to company profit and taxed at corporation tax rates.

Taking the money out

Personal: profit is yours directly. Company: you pay yourself via salary or dividends, which are taxed again personally — sometimes called "double taxation." Leaving profit in the company to reinvest avoids this.

Inheritance planning

Company shares can sometimes be transferred to family more flexibly than a personally-owned property, which may help with estate planning — though rules here are complex and worth professional advice.

Mortgage availability and rates

Limited company buy-to-let mortgages typically carry a rate premium of around 0.2-0.5% over personal buy-to-let rates, and the panel of lenders is smaller — many high-street banks don't offer limited company products at all, so you're more likely to need a specialist broker. On the upside, the interest cover ratio (ICR) lenders require is often lower for companies — commonly 125%, compared to 145% for personal higher-rate taxpayers — because companies aren't affected by the Section 24 tax restriction that pushed personal ICR requirements up. Most landlords on either route choose interest-only rather than repayment — see our repayment vs interest-only guide for why that choice matters as much as the personal/company decision itself.

Calculate mortgage repayments Check buy-to-let affordability

LBTT & ADS differences

This is a genuinely important difference, not just a tax-rate nuance. As an individual, you only pay the 8% Additional Dwelling Supplement (ADS) if you already own another residential property. A limited company pays ADS on every single residential purchase — even its very first one, with no exceptions. Standard Land and Buildings Transaction Tax (LBTT) bands apply the same way to both.

If you already own buy-to-lets personally and are thinking about moving them into a company, that transfer is treated as a sale — triggering LBTT, ADS, and potentially Capital Gains Tax all over again, based on current market value. This can be very costly and needs proper advice before acting.

Work out your LBTT & ADS

Admin and ongoing costs

Personal ownership

Minimal admin — report rental income on your self-assessment tax return each year.

Limited company

Annual company accounts, a corporation tax return, and Companies House filings — typically £500-1,500+ per year in accountancy fees, depending on complexity.

Who each route tends to suit

Basic-rate taxpayers with one or two properties often find personal ownership simpler and just as cost-effective, since the Section 24 changes have less impact at their tax rate. Higher and additional-rate taxpayers — and anyone planning to build a larger portfolio over time — more often find the company route pays for itself within a few years, particularly if profits are reinvested rather than withdrawn.

Ready to run the numbers?

Use any of our calculators to see exactly what your route would cost.

LBTT & ADS Mortgage Buy-to-let

This guide is for general information only and does not constitute tax, legal, or financial advice. Every situation is different — speak to a qualified accountant or tax adviser before deciding how to structure a property purchase.