A Gulf family advised to buy its London home through a company meets the 17 per cent company stamp duty rate before anything else: 17 per cent of the whole price, not in slices, plus the 2 per cent non-resident surcharge, on any dwelling over £500,000. It is the largest tax charge in UK property and exists to stop exactly that structure. A company that genuinely lets the property can avoid it, with conditions and a three-year clawback.
Tax
The 17 per cent company stamp duty rate: who pays it, the letting-business relief, and the three-year clawback
Quick answer
Any company, or partnership with a corporate partner, buying a single dwelling for more than £500,000 pays 17 per cent stamp duty on the whole price, plus the 2 per cent non-resident surcharge for a company controlled from abroad: £190,000 on £1,000,000. Relief to the ordinary rates applies where the dwelling is bought exclusively for a commercial letting business and no shareholder or relative occupies it. The catch is the clawback: family occupation within three years withdraws the relief, and the Annual Tax on Enveloped Dwellings tests it every year after.
The higher rate for certain corporate bodies was 15 per cent from 2012 to 30 October 2024 and is 17 per cent for transactions with an effective date on or after 31 October 2024. It is charged on the whole chargeable consideration where that exceeds £500,000, not on the slice above it: a £510,000 flat bought by a company pays £86,700, where an individual non-resident with another home would pay £51,200. The non-resident surcharge of 2 per cent is charged on top for a non-UK resident company, which includes a UK company controlled from abroad: 19 per cent, £190,000 on £1,000,000.
Who pays the 17 per cent company stamp duty rate
Companies; partnerships with at least one corporate partner; collective investment schemes. Not individuals, not partnerships of individuals, not a company acting as trustee of a settlement (a trust pays the rates in our trusts guide instead).
How the rate applies to single dwellings and multiple purchases
The rate applies to the purchase of a single dwelling, or of an interest in one, for more than £500,000; a company buying six or more dwellings in one transaction is outside it, because the purchase is non-residential, and a company buying two to five dwellings pays the rate on any single dwelling over £500,000 within the transaction. A company buying a mixed-use building pays the non-residential rates on the whole and is outside the 17 per cent.
Reliefs that remove the 17 per cent rate for companies
The rate does not apply, and the ordinary residential rates with the 5 per cent additional-property rate and the 2 per cent surcharge apply instead, where the dwelling is bought for one of these purposes: a property rental business; a property development or trading business, to be redeveloped or resold; a trade of making the dwelling available to the public (a hotel or a serviced-apartment operation on commercial terms); occupation by employees of the company’s trade; a farmhouse occupied by a farmer; a financial institution acquiring in the course of lending; and a few others.
How to claim stamp duty relief on the company return
The relief must be claimed in the return, with the company’s intention evidenced; a company that claims rental business relief and cannot show a tenancy, an agent and a business plan is in the territory of an enquiry.
Conditions for the property rental business stamp duty relief
The relief for a property rental business applies where the dwelling is bought exclusively for the purpose of letting to third parties on a commercial basis, as part of a qualifying property rental business, and is not to be occupied at any time by a “non-qualifying individual”: the company’s shareholders, their spouses, children, parents, siblings and their spouses, and anyone connected with them.
Intention at purchase and conduct afterwards for letting relief
The test is intention at purchase and conduct afterwards; a flat bought by a family company, let to a stranger for two years and then used by the family in year three is a flat on which relief has been lost. A company with several let flats and a management agreement with an agent satisfies the test easily; a company with one flat and a son who stays there in July does not.
The three-year stamp duty clawback if relief is withdrawn
If, within three years of the purchase, the dwelling is occupied by a non-qualifying individual, or ceases to be held for the relieved purpose, the relief is withdrawn and the company must file a further return and pay the difference between the ordinary rates and the 17 per cent (plus the surcharge) within 30 days of the event, with interest.
The three years run from the effective date of the purchase; after them the stamp duty relief is secure, though the Annual Tax on Enveloped Dwellings, below, has its own annual test. A family that intends to use the flat eventually should buy it in a personal name and let it in the meantime, not buy it in a company and wait three years.
How the Annual Tax on Enveloped Dwellings applies to company-owned homes
A company holding a dwelling worth more than £500,000 pays the Annual Tax on Enveloped Dwellings every year, from £4,600 in 2026/27 for a dwelling worth £500,000 to £1,000,000 and rising by band, unless a relief applies, and the reliefs mirror the stamp duty ones: a property rental business, a development business, a trade open to the public, employee occupation.
ATED relief is tested every year, not for three years
The ATED relief is tested every year, not for three, and is lost for any year in which a connected person occupies the dwelling. A company that qualifies for the stamp duty relief on purchase will usually qualify for the ATED relief each year it lets to strangers, and will lose both the day the family moves in. The company must file an ATED return each year even when claiming relief.
Worked example
The same £2,000,000 flat, three ways of holding it:
Company against personal name on a £2,000,000 flat, 2026/27
| £2,000,000 flat bought by a non-UK company owned by a Jeddah family | Family use | Let to strangers, relief claimed |
|---|---|---|
| Stamp duty | 17 per cent + 2 per cent = 19 per cent: £380,000 | Ordinary rates £153,750 + 5 per cent £100,000 + 2 per cent £40,000 = £293,750 |
| ATED, 2026/27 | £9,450 a year (band £1,000,001 to £2,000,000) | nil, with an annual relief return |
| Register of Overseas Entities | required | required |
| If the family occupies in year two | — | relief withdrawn: £86,250 more stamp duty, interest, and ATED from that year |
| Same flat bought by the father in his own name | £153,750 + £100,000 + £40,000 = £293,750; no ATED; no register | the same |
Source: GOV.UK Stamp Duty Land Tax for corporate bodies and non-UK residents; ATED bands 2026/27; firm’s calculation, October 2026.
The company saves nothing on purchase against the father’s own name even with the relief, and costs £86,250 more without it, before the annual charge and the running costs.
Our view on buying a home through a company
The 17 per cent rate is designed to make a company the wrong vehicle for a home, and it succeeds. A company is right for a portfolio of flats let to strangers, where corporation tax on rent and gains and the ability to reinvest without personal tax outweigh the compliance; it is wrong for any dwelling a family member will ever sleep in. The firm asks one question before any company purchase: will anyone in the family use it in the next ten years? If the answer is anything but no, the purchase is in a personal name, with the structure our guides on joint ownership and on wills describe.
This guide follows our guide on buying through a company or in your own name, which sets out the wider choice.
Sources: Stamp Duty Land Tax: corporate bodies (GOV.UK) · SDLT manual: higher rate for corporate bodies, reliefs and withdrawal (HMRC SDLTM09500 onwards) · Annual Tax on Enveloped Dwellings: reliefs (GOV.UK) · Stamp Duty Land Tax: non-UK residents (GOV.UK). Checked against GOV.UK on 14 October 2026: the higher rate for corporate bodies (17 per cent since 31 October 2024), its reliefs and withdrawal, the non-resident surcharge and the ATED bands for 2026/27. General information, not tax advice; a UK tax adviser should model any corporate purchase. Figures verified 14 October 2026.
Frequently Asked
Questions about the 17 per cent company stamp duty rate
Not if the company buys it exclusively for a commercial letting business and no family member occupies it; it pays the ordinary rates plus 5 and 2 per cent. The relief is claimed on the return and can be clawed back within three years.
Not without losing the stamp duty relief (if within three years) and the ATED relief (for every year she is there). A flat for a child should be in her name or a bare trust, as our guide on buying for a child explains.
17 per cent for any purchase completing on or after 31 October 2024; 15 per cent before. Older guides, including some on this site before today’s correction, said 15.
£190,000 for a non-UK resident company, or a UK company controlled from abroad: 17 per cent on the whole price plus the 2 per cent non-resident surcharge. The rate is charged on the whole consideration where it exceeds £500,000, not on the slice above, so a £510,000 flat pays £86,700 where an individual non-resident with another home would pay £51,200.
Companies, partnerships with at least one corporate partner, and collective investment schemes buying a single dwelling for more than £500,000. Not individuals, partnerships of individuals, or a company acting as trustee of a settlement. A company buying six or more dwellings in one transaction is outside it because the purchase is non-residential, as is a company buying a mixed-use building.
The ordinary residential rates plus the 5 per cent additional-property rate and the 2 per cent non-resident surcharge. On a £2,000,000 flat that is £153,750 plus £100,000 plus £40,000, £293,750 in all, against £380,000 at 19 per cent without relief. It is the same figure the father would pay buying in his own name, with no ATED and no register.
The company’s shareholders, their spouses, children, parents, siblings and their spouses, and anyone connected with them. The dwelling must not be occupied by any of them at any time; a flat let to a stranger for two years and used by the family in year three is a flat on which relief has been lost.
The relief is withdrawn. The company must file a further return and pay the difference between the ordinary rates and the 17 per cent plus surcharge within 30 days of the event, with interest. On the £2,000,000 worked example that is £86,250 more stamp duty, and ATED runs from that year. After three years the stamp duty relief is secure.
From £4,600 in 2026/27 for a dwelling worth £500,000 to £1,000,000, and £9,450 for the £1,000,001 to £2,000,000 band, rising by band above that. A letting company claiming relief pays nil but must still file an ATED return every year, and loses the relief for any year in which a connected person occupies the dwelling.
Not a home. A company is right for a portfolio of flats let to strangers, where corporation tax on rent and gains and the ability to reinvest outweigh the compliance; it is wrong for any dwelling a family member will ever sleep in. We ask one question first: will anyone in the family use it in the next ten years? If the answer is anything but no, buy in a personal name.
