Corporation Tax for a property (rental) company

In short: A property (rental) company pays Corporation Tax on its rental profits — not Income Tax. The rate is 19% on profits up to £50,000 and 25% above £250,000, with Marginal Relief in between (rates from 1 April 2023, GOV.UK). You file a CT600 plus iXBRL accounts and computations within 12 months of your year end, and pay the tax 9 months and 1 day after it.

A property company (often a "buy-to-let limited company" or SPV — special purpose vehicle) is a limited company whose business is holding and letting property. Because it's a company, its rental profit falls under Corporation Tax, and it must file a full Company Tax Return online. You can prepare and file that return yourself without an accountant if the figures are straightforward.

How is a property company taxed?

A property company pays Corporation Tax on its property business profit — rental income for the period minus allowable expenses. It does not pay Income Tax, and the director's personal tax (on any salary or dividends taken out) is separate.

The Corporation Tax rates for the financial year beginning 1 April 2023 onwards are:

The £50,000 and £250,000 limits are shared across associated companies and reduced for short accounting periods (GOV.UK Corporation Tax rates). If your company's profit lands in the middle band, our Corporation Tax rates and Marginal Relief guide shows how the taper works.

Property company vs individual landlord: the mortgage interest difference

The single biggest tax difference between holding property personally and through a company is how mortgage interest is treated. A company deducts its finance costs in full; an individual landlord cannot.

Since 6 April 2020, an individual landlord's relief for residential finance costs has been limited to a 20% basic-rate tax reduction, and that restriction applies to individuals, not companies (GOV.UK: tax relief for residential landlords). For a highly geared portfolio, full interest relief is the main reason landlords incorporate.

What expenses can a property company deduct?

A property company deducts the revenue costs of running the lettings business from its rental income. Allowable expenses typically include:

• Letting agent and management fees
• Repairs and maintenance (not improvements — those are capital)
• Buildings and landlord insurance
• Ground rent, service charges, and council tax or utilities you pay
• Accountancy and other professional fees
• Mortgage and other finance interest (deducted in full, unlike for individuals)

Capital costs — buying the property, or improving it — are not deducted from rental profit; they affect any future capital gain instead.

Worked example: a property company's Corporation Tax

Here is a worked calculation for a small property company with a single financial year:

• Rental income: £80,000
• Allowable expenses (agent fees, repairs, insurance, interest): £50,000
• Property business profit: £30,000

£30,000 is below the £50,000 small-profits limit, so it's taxed at 19%:

£30,000 × 19% = £5,700 Corporation Tax

On the CT600, that £30,000 net property profit is reported as income from a property business (box 190), and the £5,700 flows through to the tax payable. No Marginal Relief applies because the profit is under £50,000.

What you actually file, and when

A property company files a full Company Tax Return, which is three things together:

1. The CT600 return form with the tax calculation.
2. Your statutory accounts — for most small property companies, FRS 105 (micro-entity) or FRS 102 Section 1A (small). Our micro vs small accounts guide explains which applies.
3. Your tax computations showing how accounts profit becomes taxable profit.

The accounts and computations must be attached in iXBRL (tagged format). Key dates:

• File the return: within 12 months of your accounting period end.
• Pay the Corporation Tax: 9 months and 1 day after the period end — earlier than the filing deadline.

Miss the filing deadline and HMRC charges £200 the day it's late and another £200 if it's more than three months late (uprated from £100 for filing dates on or after 1 April 2026), then tax-geared penalties at 6 and 12 months (GOV.UK penalties). See our Corporation Tax deadlines guide for the full timeline.

Other taxes a property company should know

Corporation Tax is the main one, but a property company may also meet:

• ATED (Annual Tax on Enveloped Dwellings) — an annual charge that can apply when a company holds a residential property worth more than £500,000, with reliefs for genuine letting businesses (GOV.UK ATED).
• Stamp Duty Land Tax on purchases (companies usually pay the higher rates on additional dwellings).

This guide covers Corporation Tax — the return your company files every year.

How to file your property company's Corporation Tax return yourself

1. Gather your figures — rental income, allowable expenses, and a balance sheet that balances.
2. Have your references ready — your company UTR (10 digits from HMRC), your CRN from Companies House, and Government Gateway details enrolled for Corporation Tax Online.
3. Prepare the accounts and computations as iXBRL (FRS 105 or FRS 102 §1A).
4. Complete the CT600 — the property income, expenses and tax flow from your figures.
5. Submit online to HMRC, then keep the acceptance confirmation.

Filing a property company return with Taxley

Taxley is built around exactly this case: it asks for your rental income, expenses and balance sheet, then prepares the CT600, the FRS 105 / FRS 102 §1A iXBRL accounts and the tax computations for you — working the Corporation Tax out to the penny, including Marginal Relief and associated-company limits. Property is the default business type, so the property income lines map straight to the right CT600 boxes.

You stay responsible for the figures, and a qualified review is worth it for anything unusual — but for a straightforward rental company, you can start your return now and see the tax before you pay anything. Pricing is on the pricing page.

Frequently asked questions

Does a limited company pay Income Tax or Corporation Tax on rental income?

Corporation Tax. A company's rental profit is charged to Corporation Tax at 19%–25%, not Income Tax. Income Tax only comes in personally, on any salary or dividends you take out of the company.

Can a property company deduct mortgage interest?

Yes — in full. A limited company deducts mortgage and other finance interest from its rental profit. This differs from individual landlords, whose relief is capped at a 20% basic-rate tax credit.

Do I need to file iXBRL accounts for a property company?

Yes. A Company Tax Return includes the CT600 plus statutory accounts and computations attached in iXBRL. Most small property companies use FRS 105 (micro) or FRS 102 Section 1A.

What's the Corporation Tax deadline for a property company?

File the return within 12 months of your accounting period end. The Corporation Tax itself is due earlier — 9 months and 1 day after the period ends.

Can I file a property company tax return without an accountant?

Yes, for a straightforward rental company. Software can prepare and submit the CT600 and iXBRL accounts. You remain responsible for the accuracy of the figures, so check anything unusual or have it reviewed.

Taxley prepares the CT600, FRS 105 / FRS 102 §1A accounts and tax computations as iXBRL from the figures you enter, ready to file. This guide is general information, not tax advice — you're responsible for the accuracy of your return, and a qualified review is recommended before you file.