Landlord tax calculator: limited company vs personal (2026/27)
This calculator compares the ongoing tax on your rental income in your own name against a limited company, using 2026/27 personal rates and FY2026 corporation tax.
Personally, mortgage interest is not deductible: you pay income tax on rent minus other expenses, then claim a 20% (2026/27) Section 24 credit on the interest. In a company, interest is deductible and profits bear corporation tax at 19% up to £50,000, marginal relief to £250,000, then 25% (FY2026), with dividend tax on top if you draw the profits out.
Personally, mortgage interest is not deductible: you pay income tax on rent minus other expenses, then claim a 20% (2026/27) Section 24 credit on the interest. In a company, interest is deductible and profits bear corporation tax at 19% up to £50,000, marginal relief to £250,000, then 25% (FY2026), with dividend tax on top if you draw the profits out.
How to use it
- Enter your annual rent, mortgage interest and other expenses.
- Add your other income (salary, pension, and so on).
- Tick whether you would draw the company's profit as dividends, because a company only looks cheap while money stays inside it: dividends above the £500 allowance are taxed at 10.75% or 35.75% (2026/27).
- Then flip the 2027/28 preview to see the personal side under next April's rules: property income taxed at 22%, 42% and 47%, with the Section 24 credit rising to 22% (from 6 April 2027).
Be careful with what this comparison cannot tell you
This compares ongoing tax only. Moving an existing property into a company is a disposal and a purchase: it can trigger capital gains tax and stamp duty land tax, company mortgages usually cost more, and there are running costs for accounts and filings. The right answer depends on your income, your gearing, how long you will hold, and your exit and inheritance plans. Do not incorporate on the strength of a calculator, this one included.
Assumptions and limits
Figures are correct as at July 2026, from GOV.UK: Income Tax rates, GOV.UK: Corporation Tax rates and GOV.UK: tax on dividends. Not modelled:
- The personal allowance taper above £100,000.
- The dividend additional rate.
- National Insurance, and employer costs of salary extraction.
- The £1,000 property allowance.
- Estimates only.
Frequently asked questions
Does a limited company always beat owning personally? No. While profits stay in the company the company route often shows less tax, because interest is deductible and corporation tax starts at 19% (FY2026). Draw the profits as dividends and the gap narrows or reverses, especially for basic rate taxpayers. Higher rate taxpayers with large mortgages tend to benefit most; run your own numbers.
- Can I just transfer my existing property into a company? You can, but the transfer is treated as a sale at market value. That can crystallise capital gains tax, and the company usually pays stamp duty land tax including the additional-dwelling surcharge on the way in. Incorporation relief exists for genuine property businesses but has conditions. This is exactly the decision to take advice on before acting.
- What changes for landlords from April 2027? From 6 April 2027 property income has its own income tax rates of 22%, 42% and 47% (2027/28), and the Section 24 credit on mortgage interest rises from 20% to 22%. Both are in the calculator's preview toggle. Dividend rates already rose to 10.75% and 35.75% from 6 April 2026, a year earlier.
- How is dividend tax worked out in the company column? The calculator assumes the company's post-tax profit is drawn as dividends on top of your other income. The first £500 is covered by the dividend allowance (2026/27); the rest is taxed at 10.75% within your basic rate band and 35.75% above it. The dividend additional rate is not modelled.
- What is marginal relief on corporation tax? For FY2026 profits up to £50,000 pay 19% and profits over £250,000 pay 25%.
- Between the two, tax is 25% minus marginal relief of 3/200ths of the shortfall below £250,000, so the effective rate climbs gradually. The calculator applies the formula automatically.
