Incorporating a property business

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

There are several tax areas where the treatment of a residential property letting business run through a company is different to where such properties are held personally. These differences could have an impact on the overall level of profit for the owner of the property depending on their income requirements and long-term strategy in relation to the property portfolio. This guidance note compares the different tax treatments and, with examples, reviews whether incorporating a property letting business is better than holding it personally.

Comparison of tax treatments of individuals and companies

The comparison of holding a property letting business personally or holding it through a company is summarised below with links to more guidance:

Property owned personally	Property owned by the company	Guidance note links
Income charged at income tax rates of 20%, 40% or 45%	Income charged at corporation tax rate of between 19% and 25% (depending on profit levels)	Proforma income tax calculation, Computation of corporation tax
Capital gain on sale of residential property charged at 18%/ 24% from 2024/25 (18% / 28% for

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