Limited Company Property Ownership: Pros and Cons

Exploring the Pros and Cons of Owning Property in a Limited Company vs. Personal Name

Making the choice between owning property in your personal name or through a limited company is a multifaceted decision that lacks a universal solution. The path you opt for depends on an array of elements that are distinct to your unique situation and objectives. Life variables change with events like marriage, parenthood, divorce, illness, tax rules, and financial shifts.

Personal ownership offers control but exposes personal assets; a limited company provides liability protection but entails complexity.

Owning Property in Your Personal Name


Attractive Mortgages: Personal ownership can grant access to loan-to-value mortgages with more favorable interest rates in comparison to mortgages available for limited companies.

Flexibility in Income Withdrawal: Personal ownership allows for more flexibility in withdrawing income as needed.

Capital Gains Tax Benefits: Potential benefits of lower capital gains tax rates (18% or 28%) exist, especially if you’ve resided in the property at some point, potentially qualifying for private residence relief.

Diverse Mortgage Options: Personal property owners enjoy a broader selection of mortgage lenders and competitive financing options.

Simplified Tax Reporting: Reporting annual income and expenses to HMRC tends to be relatively straightforward.


Higher or additional rate taxpayers may have mortgage interest relief restricted to basic rate, increasing their tax liability.

Inheritance Tax Complexities: Inheritance tax planning in a personal name can be more intricate compared to a limited company. Limited companies can use strategies such as alphabet shares and wealth transfer to children within seven years post-death for benefits.

Owning Property Through a Limited Company

Historical Disadvantages (evolving):

Limited Mortgage Availability: Historically, limited company ownership faced constraints, such as fewer mortgage lenders with higher interest rates. Nevertheless, this scenario is evolving as lenders recognize the implications of changes in tax relief on mortgage interest.
Advantages (still pertinent):

Limited companies benefit from a 19% corporate tax rate, while individuals face a progressive tax system with rates ranging from 20% to 45%. This translates to greater flexibility in retaining profits within the company.

Inheritance Tax Planning Opportunities: Limited companies provide enhanced opportunities for inheritance tax planning, including options like Family Investment Companies.

Limited company ownership provides full mortgage interest tax relief, attractive to higher rate taxpayers due to tax benefits.

In summary, The choice between owning property personally or through a limited company is highly individualized and requires thorough consideration of relevant factors.

Consult experts for effective guidance in complex decision-making, tailored to your unique circumstances and goals.

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