Three questions come through our contact form more than any others, and they are really one question wearing three hats. Should the rental property be in my own name or in a company? What happens to the tax if I move it? And what will the taxman take when I eventually sell?
Here is how we answer them for landlords in Belfast and across Northern Ireland, with the numbers worked rather than waved at.
First, a correction that matters
People describe rental income as “renting as a sole trade”. It is a fair description of how it feels, and the rent does go on the same self-assessment return as self-employment. But in tax terms letting property is a property business, not a trade.
That distinction is not pedantry. It decides real money:
- You pay no Class 4 National Insurance on rental profit, which a genuine sole trader does pay on trading profit.
- Most trading reliefs, including the reduced capital gains rate on a business sale, are generally not available when you sell a let property.
- Property losses can only be set against property profits, not against your other income.
So the real choice is not sole trader versus limited company. It is property held personally versus property held through a company.
The short answer
Hold it personally if you are a basic-rate taxpayer, your borrowing is low, you have one or two properties, and you need the rent to live on.
Hold it in a company if you are a higher-rate taxpayer, the properties are mortgaged, you are buying rather than transferring, and you intend to reinvest the profit rather than draw it.
Everything else is the detail of where your own numbers fall between those two.
Why Section 24 changed the maths
Before 2017, a landlord deducted mortgage interest as an expense and paid tax on what was left. Section 24 ended that for individuals. Mortgage interest is no longer deducted from rental profit. Instead it gives a tax credit worth 20% of the interest.
For a basic-rate taxpayer this is broadly neutral. For a higher-rate taxpayer it is expensive, because the profit is taxed at 40% but the interest only relieved at 20%. It is also why a heavily mortgaged landlord can face a tax bill on a profit they never actually saw in the bank.
Inside a limited company, Section 24 does not apply. Mortgage interest is an ordinary deductible expense again.
The comparison, with numbers
Take a Belfast landlord with two buy-to-lets and £55,000 of employment income, so a higher-rate taxpayer before the rent is counted.
- Gross rent: £24,000
- Mortgage interest: £9,000
- Other allowable costs (letting agent, repairs, insurance, safety certificates): £3,000
- Cash the properties actually generate: £12,000
Held personally. Taxable rental profit is £24,000 less £3,000 of costs, so £21,000, because the interest is not deductible. Tax at 40% is £8,400, reduced by the Section 24 credit of 20% of £9,000, which is £1,800. Tax due: £6,600. Cash left after tax: £5,400.
Held in a company, profit retained. The company deducts everything, including the interest, so profit is £12,000. Corporation tax at the 19% small profits rate is £2,280. Retained in the company: £9,720.
Held in a company, profit taken out. Take that £9,720 as a dividend. After the £500 dividend allowance, £9,220 is taxed at the higher dividend rate of 35.75%, which is £3,296. In your pocket: £6,424. (Dividend rates rose for the 2026/27 tax year; our guide to director’s salary vs dividends in 2026/27 sets out the full bands.)
What the three numbers actually say
- Held personally: £5,400 in your pocket.
- Company, profit retained: £9,720 left invested.
- Company, profit drawn as a dividend: £6,424 in your pocket.
If the money stays in the business, the company is dramatically better: £9,720 against £5,400, and the difference compounds every year into the next deposit.
If you need the money to live on, the company advantage collapses to about £1,000 a year. Running a company also brings its own yearly costs, accountancy and filings among them, and depending on how it is set up those can eat into that advantage or cancel it out altogether.
Add one more thing that spreadsheets often miss: buy-to-let mortgages held in a company usually carry a higher rate and higher arrangement fees than personal ones. That gap eats into the saving before you start.
The single most useful test: does the rent stay in the business or come out to you? Retained profit favours the company by a wide margin. Drawn profit rarely justifies it on tax alone.
What it costs to move property you already own
This is where most conversations turn, and it is the part people find out about too late.
Moving a property from your own name into your own company is not an administrative transfer. For tax it is a disposal at market value, even though no money changes hands and the property never leaves your control.
Three costs follow:
- Capital gains tax on the transfer. The gain is measured against market value on the day, so a property bought years ago can produce a real tax bill on a sale that never happened. Reliefs exist, but they depend closely on how the portfolio is actually run, and they are contested often enough that nobody should assume one applies.
- Stamp duty land tax, paid by the company. The company is buying the property, and the additional-dwelling rates apply.
- Refinancing. Personal mortgages do not transfer. The company takes new borrowing, with new fees and usually a higher rate, and lenders will want personal guarantees.
For a landlord buying their next property, none of this arises: buy it in the company from the start. For a landlord with an established portfolio, the entry cost is often the whole argument, and it is why the answer for existing properties is frequently “leave them where they are and buy the next one differently”.
Capital gains tax when you sell
The third question, and the one with a deadline attached.
Held personally. Residential property gains are taxed at 18% or 24%, depending on where the gain sits against your income in the year of sale. The £3,000 annual exempt amount comes off first. Your gain is the sale price less what you paid, less your buying and selling costs, less any capital improvements (an extension counts, a repainted hall does not). If the property was ever your own home, private residence relief reduces the gain for that period of ownership.
Held in a company. There is no capital gains tax. The company pays corporation tax on the gain at 19% to 25% (see our corporation tax rates and allowances for 2026/27). There is no annual exempt amount, and getting the proceeds out to you is a second tax charge on top.
Two practical points. The rate depends on your income in the year you sell, so a sale timed into a lower-income year can cost meaningfully less. And a gain that straddles two tax years can sometimes use two annual exempt amounts if the sale is genuinely structured that way. Both need deciding before you accept an offer, not afterwards.
The 60-day deadline that catches everyone
If capital gains tax is due on the sale of UK residential property, you must file a separate return and pay the tax within 60 days of completion. Not by the following 31 January. Sixty days.
It is a standalone filing, it is easy to miss because it does not feel like a tax return, and late filing brings penalties. In our experience it is the single most common thing landlords get wrong, and it is entirely avoidable by telling your accountant before you complete rather than the following January.
Making Tax Digital pulls the same way
From April 2026, landlords holding property personally with gross property income over £50,000 must keep digital records and send HMRC four quarterly updates plus a final declaration. The threshold falls to £30,000 in April 2027 and £20,000 in April 2028.
Note that the test is gross rent, not profit. A landlord with £55,000 of rent and no profit at all is still inside the rules.
Company-held property is outside Making Tax Digital for Income Tax. That is not a reason on its own to incorporate, but for a landlord already close to the line it is one more item on the same side of the scale. Our complete guide to MTD for landlords covers joint ownership and the threshold maths in detail.
We handle the digital records and the quarterly filings as part of our service. The only step at your end is the bank feed, and we organise that.
The Northern Ireland detail
Most of the above is UK-wide. Some of it is not.
Rates here work differently from Council Tax, and landlords are usually liable for the rates on smaller properties rather than the tenant. If you let houses in multiple occupation in Belfast, there is a licensing regime on top of everything else. And if you own property on both sides of the border, the UK and Irish returns have to agree with each other, which is a job in itself.
Where the line usually falls
Lean towards holding personally if: you have one or two properties, borrowing is low or nil, you are a basic-rate taxpayer, you need the rent as income, you already own the properties, or your horizon is short.
Lean towards a company if: you are a higher-rate or additional-rate taxpayer, the properties are mortgaged, you are buying rather than transferring, you want to reinvest rather than draw, you are building a portfolio, or you are thinking about passing property to the next generation.
And the honest caveat: these are tendencies, not rules. We have run this comparison for landlords who looked like textbook incorporation candidates and came out better off staying as they were, usually because of the entry cost or because they needed the income. The only way to know is to put your own figures through it.
Get the comparison run on your own numbers
There is no general answer to this, only your answer. Tell us what you own, what you owe on it, what you earn elsewhere, and whether you need the rent to live on, and we will run both routes side by side and tell you plainly which way it falls, including when the answer is to change nothing.
You do not need to be an existing client. We run this comparison as a standalone piece of work for landlords who are not otherwise clients, as well as for the landlords we already look after.
We are a Belfast accountancy practice working with landlords across Northern Ireland, from a single let to portfolios of twenty and more. See property and landlord accounting and personal tax, or just get in touch. The first conversation is free.
Contact us or call 028 9508 4138.
