Limited Company vs Personal Buy-to-Let Calculator

It depends on your tax band, how much mortgage interest you have and whether you need the income now. Higher and additional-rate landlords with sizeable interest often keep more through a company, because interest is fully deductible against corporation tax. Basic-rate landlords taking the income straight out often do better personally. This tool shows both side by side.

The company pays corporation tax on its rental profit after deducting mortgage interest in full - 19% up to £50,000 of profit, 25% above £250,000, with marginal relief in between. Taking the money out as dividends adds dividend tax on top. Retaining and reinvesting profit avoids that second layer for now.

Section 24 restricts individual landlords to a 20% credit on mortgage interest, so higher-rate landlords are effectively taxed on income they paid to the lender. Companies are not affected by Section 24 and deduct interest in full, which is why highly-geared portfolios often favour the company route despite the extra running costs.

Company buy-to-let mortgages usually carry higher rates and fees, you will pay for annual accounts and a tax return, and moving existing property into a company can trigger stamp duty and capital gains tax. This calculator compares the tax on the profit only - weigh those extra costs and take professional advice before deciding.