As the UK property market continues to deliver strong investment returns, more investors—both domestic and international—are choosing to set up companies to manage and expand their property portfolios. Operating through a limited company structure can offer notable tax efficiencies, asset protection, and financing advantages. However, it is essential to set up the right legal structure and understand the associated regulatory requirements. In this guide, we explore why and how investors set up a UK company for property investment, and how Fraser Bond can assist in building a smart, compliant investment structure.
Operating through a limited company often results in lower tax exposure:
Rental profits are subject to corporation tax (currently 25%) rather than personal income tax rates (up to 45%).
Profits retained within the company can be reinvested more tax-efficiently to fund portfolio expansion.
Mortgage interest is treated as a business expense for companies, providing full relief (unlike individuals, who face restrictions).
Tip: For higher and additional-rate taxpayers, a company structure can significantly reduce annual tax liabilities.
Specialist buy-to-let lenders increasingly offer products tailored for company borrowers, supporting larger loan-to-value (LTV) ratios and more flexible underwriting criteria.
A limited company structure separates personal and business liabilities, reducing personal financial risk and facilitating easier asset protection strategies, particularly for succession planning.
Shares in a company can be owned by multiple parties, making it easier to manage joint ventures, family ownership structures, or inheritance planning.
Most investors choose a Private Limited Company (Ltd) structure.
Some more complex arrangements (e.g., partnerships or group structures) may be appropriate for very large portfolios.
To legally incorporate a company, you must:
Choose a unique company name.
Provide a UK registered office address.
Appoint at least one director (no UK residency requirement, but it simplifies banking and administration).
Allocate shares among shareholders.
Select an appropriate SIC code (68100 – buying and selling real estate is most common).
Essential for handling rental income, expenses, mortgage payments, and maintaining clean financial separation.
Note: Some banks offer international business accounts if directors are based overseas.
Fraser Bond can introduce investors to brokers experienced in securing limited company buy-to-let mortgages, which differ from personal lending in underwriting criteria and terms.
Submit annual accounts to Companies House.
File corporation tax returns with HMRC.
Manage VAT registration if applicable (usually for commercial property or high turnover portfolios).
Maintain detailed accounting records.
Strategy: Engaging professional accountants and legal advisors experienced in property-focused companies is crucial for efficient compliance and tax planning.
Double Taxation Risk: Profits retained within the company are taxed at the corporation tax rate, but extracting dividends will incur additional personal tax liabilities.
Stamp Duty Land Tax (SDLT): Higher SDLT rates may apply, including the 3% surcharge for second properties and the 2% non-resident surcharge.
Exit Strategy Implications: Selling property from within a company can trigger corporation tax on gains, with additional personal tax upon distribution of funds.
Advice: Setting up a company should be aligned with long-term investment objectives. Professional tax planning is essential before taking action.
Fraser Bond provides expert guidance to investors setting up companies for property investment. Our services include:
Advising on the best structure for your investment goals
Introducing trusted legal, accounting, and mortgage advisory partners
Identifying high-performing property opportunities suitable for corporate purchase
Providing comprehensive acquisition, management, and portfolio growth services
We ensure that investors are fully supported in structuring, growing, and protecting their UK property portfolios.
Setting up a company for property investment in the UK offers strategic advantages, but it requires careful planning and professional support to maximise the benefits. Fraser Bond provides the expertise and network required to ensure that your property investment journey is efficient, compliant, and profitable.
Contact Fraser Bond today to discuss how we can assist you with structuring your next property investment venture.
