Personal vs Limited Company Comparison

The classic property investor question. The answer depends on three things: your other income, your reinvestment strategy, and your portfolio scale.

Higher-rate taxpayers benefit most

If you're already paying 40%+ income tax on your salary, every additional pound of personal rental profit is taxed at 40-45%. In a limited company, the same pound is taxed at 19-25% corporation tax. If you don't need to extract it immediately (you're reinvesting in more garages), the tax saving compounds.

Reinvestment changes everything

The dividend tax is the killer. If you extract all profits as dividends, you re-tax already-taxed money — and the combined effective rate often matches or exceeds personal ownership. But if you retain profits in the company to fund the next purchase, you skip the dividend layer entirely. Long-term portfolio builders should usually be in a company.

Section 24 doesn't apply to garages

The infamous Section 24 mortgage interest restriction (which made personal residential BTL much less attractive) doesn't apply to garages — because you can't really get a mortgage on individual garages anyway. So garages don't suffer the same disadvantage as residential BTL when held personally. This evens the playing field somewhat.

The admin cost

Running a limited company costs roughly £600-1,500/year more than personal ownership: accountancy fees, Companies House filings, separate bank account, slightly more complex bookkeeping. For a small portfolio (1-3 garages) this overhead can wipe out the tax saving.

Rule of thumb

For most UK garage investors, the breakeven point is around £8,000-12,000 of annual rental profit. Below that, personal ownership is usually fine. Above that — especially if you're a higher-rate taxpayer planning to scale — incorporation usually wins.

This calculator and explainer are general guidance, not tax advice. Speak to a property-savvy accountant before making structural decisions about your portfolio.