Whether to buy a London property in your own name, jointly with family, or through a company is the structural question every Gulf buyer is asked, usually by someone selling a company. The honest answer on how to hold a London property depends on what the property is for, how long it will be held, and who will own it next. The annual tax on enveloped dwellings is what makes a company-held family home expensive.
Tax
Own name, joint names or a company? How to hold a London property
In your own name
For a Gulf family buying one or two London properties, own name or joint names is almost always right: stamp duty at the individual rates, income tax on rent at 20% to 45%, and capital gains tax at 18% or 24%. A company suits a portfolio of four or five let properties and upwards. The catch is a company-held family home: a flat 17% stamp duty plus the 2% non-resident surcharge, £190,000 on £1,000,000, an annual charge from £4,600, and no inheritance tax shelter since 2017.
The simplest and, for one or two properties, usually the right answer. Stamp duty at the individual rates with the additional-dwelling and non-resident surcharges; income tax on rental profit at 20% to 45%, with mortgage or purchase-plan finance relieved as a 20% credit; capital gains tax at 18% or 24% on sale, with the annual exemption; and inheritance tax at 40% on the value above the allowances on death. No annual filing beyond the tax return. The home can be used by the family without any tax consequence.
Buying a London property jointly with family
Two or more individuals can own together, as joint tenants (the survivor takes all) or tenants in common (each owns a share that passes under their will). Rental profit and gains are split, which uses more than one basic-rate band and more than one capital gains exemption; a flat bought by parents and two adult children spreads the income across four returns. Shares can be unequal. A declaration of trust records who owns what. This is the usual structure for a family that wants to hold a London home across a generation without a company.
Can I buy a London house through a company?
A UK or overseas company buys the property and the family owns the shares. The company pays corporation tax on rental profit, at 25% above £250,000 and 19% below £50,000, deducts finance costs in full, and pays corporation tax on the gain when it sells. Money comes out as dividends or salary, taxed again in the hands of a UK-resident recipient but generally not in the Gulf.
Overseas company registration and inheritance tax on UK property
An overseas company must be registered on the UK’s Register of Overseas Entities, naming its beneficial owners, before it can buy or sell. Since 2017 shares in a company that holds UK residential property are within UK inheritance tax, so the company no longer shelters the home from that tax.
What a company costs on purchase
A company pays the same stamp duty as an individual buying a second home, including the non-resident surcharge if it is controlled from abroad. But where a company buys a dwelling for more than £500,000 and the property will not be let commercially or used in a property business, a flat 17% rate applies to the whole price plus the non-resident 2%: £190,000 on a £1,000,000 home. The 17% rate is relieved for a genuine letting business, which is why the company route is only ever discussed for rented property.
Annual Tax on Enveloped Dwellings for company-owned London homes
A company that owns a UK dwelling worth more than £500,000 pays an annual charge, the Annual Tax on Enveloped Dwellings, unless it claims relief, and the relief must be claimed on a return every year even when the charge is nil. The 2026-27 charges are:
Annual Tax on Enveloped Dwellings, 2026-27 bands
| Property value | Annual charge 2026-27 |
|---|---|
| More than £500,000 to £1m | £4,600 |
| More than £1m to £2m | £9,450 |
| More than £2m to £5m | £32,200 |
| More than £5m to £10m | £75,450 |
| More than £10m to £20m | £151,450 |
| More than £20m | £303,450 |
Source: GOV.UK, Annual Tax on Enveloped Dwellings: the basics; 2026-27 bands checked 13 October 2026.
Relief is available where the property is let to unconnected tenants on commercial terms. It is not available for a home used by the shareholders or their family, and a single week’s use by a connected person can forfeit the relief for the year. That is the rule that ends most conversations about holding a family home in a company: a £3m house used by the family in the summer would cost £32,200 a year in this charge alone, on top of the 17% stamp duty.
When to hold a London property in each structure
The firm’s rule of thumb for each structure:
- Own name: a home the family will use, or one or two rented flats held for the long term. Lowest cost, least administration.
- Joint names: the same, where the income or the eventual gain is better spread across several people, or where the next generation should own from the start.
- Company: a portfolio of rented property built up over years, financed with borrowing, with profits reinvested rather than drawn. The corporation tax rate and full finance relief outweigh the extra administration and the exit tax when the holding is large enough, which in our experience means four or five properties and upwards, all let.
The structure is chosen once, before exchange, with a UK tax adviser, because changing it later means a sale to the new owner with stamp duty and capital gains tax on the way. We arrange that advice as part of a purchase and carry the decision through the solicitor’s work.
Related guides: The Register of Overseas Entities, UK inheritance tax on a London home and An English will for a London property.
Sources: Stamp Duty Land Tax: corporate bodies (GOV.UK) · Annual Tax on Enveloped Dwellings: the basics (GOV.UK) · Register an overseas entity (GOV.UK). Checked against GOV.UK on 13 October 2026, including the 2026-27 annual charge bands. Rates change at Budgets. General information, not tax advice; the structure for a particular buyer is for their adviser to confirm before exchange. Figures verified 13 October 2026.
Frequently Asked
Questions about holding a London property
Not since April 2017 for a company holding a UK home; the shares are within the UK estate. The structure’s original reason has gone.
For a portfolio of let flats where corporation tax on rent and gains, and relief from the 17 per cent stamp duty rate as a letting business, outweigh the Annual Tax on Enveloped Dwellings and the Register of Overseas Entities burden; rarely for a family home.
Registration with verified beneficial owners before the company can buy, and an annual update; our guide on the register sets out the process.
Where a company buys a dwelling for more than £500,000 that will not be let commercially or used in a property business, a flat 17% applies to the whole price plus the 2% non-resident surcharge if the company is controlled from abroad: £190,000 on a £1,000,000 home. The 17% rate is relieved for a genuine letting business, which is why the company route is only discussed for rented property.
Not without paying the Annual Tax on Enveloped Dwellings. Relief is only available where the property is let to unconnected tenants on commercial terms, and a single week’s use by a connected person can forfeit it for the year. A £3m house used by the family in the summer would cost £32,200 a year in this charge alone, on top of the 17% stamp duty.
Yes. A company owning a UK dwelling worth more than £500,000 must claim the relief on a return every year, even when the charge is nil. The 2026-27 charges run from £4,600 for a property worth more than £500,000 to £1m up to £303,450 for one worth more than £20m.
Joint tenants own together and the survivor takes all; tenants in common each own a share, which can be unequal and passes under their will. A declaration of trust records who owns what. Rental profit and gains are split between the owners, so a flat bought by parents and two adult children spreads the income across four tax returns.
In your own name, income tax on rental profit at 20% to 45%, with mortgage or purchase-plan finance relieved as a 20% credit. In a company, corporation tax at 25% above £250,000 and 19% below £50,000, with finance costs deducted in full; money then comes out as dividends or salary, taxed again for a UK-resident recipient but generally not in the Gulf.
Only by a sale to the new owner, with stamp duty and capital gains tax on the way. The structure is chosen once, before exchange, with a UK tax adviser; the firm arranges that advice as part of a purchase and carries the decision through the solicitor’s work.
Capital gains tax at 18% or 24% on the gain, with the annual exemption. Owning jointly splits the gain and uses more than one exemption. A company instead pays corporation tax on the gain when it sells, and on death a personally held property is within inheritance tax at 40% on the value above the allowances.
