A limited company that owns let property — a buy-to-let company, or one holding a few commercial units — files the same two things every year as any other company: statutory accounts at Companies House and a Company Tax Return (CT600) with HMRC. What is different is inside them. The property is usually an investment property, the rents are taxed as a property business rather than a trade, and the mortgage interest is relieved in its own way. This guide walks through all of it with one worked example, Example Lettings Ltd.
The worked example
Example Lettings Ltd bought a house to let in its first year for £250,000, with a £180,000 mortgage and £70,000 lent by its director. In the year to 31 March 2026:
| £ | |
|---|---|
| Rents received | 36,000 |
| Letting agent, repairs, insurance and accountancy | (9,000) |
| Mortgage interest | (12,000) |
| Increase in the value of the house (fair value gain) | 25,000 |
| Profit before tax | 40,000 |
The Corporation Tax is £2,850: the property business makes £27,000, the interest is relieved against it, and the £25,000 gain is not taxed until the house is sold. The Corporation Tax article works through the numbers.
The two filings and their deadlines
- Accounts at Companies House: due nine months after the end of the accounting period. See Companies House filing deadlines.
- Corporation Tax return (CT600) to HMRC: due twelve months after the end of the period, with a copy of the accounts and the tax computation attached.
- Corporation Tax payment: due nine months and one day after the end of the period, so it falls before the return is due.
Tax Optimiser prepares both from the same figures and files them from one wizard, described in Filing the accounts and CT600.
Choose the accounts type: FRS 105 or FRS 102 Section 1A
The biggest decision for a property company is how the property is shown in the accounts. That depends on the Accounts Type of the period, set on the period’s Overview under Accounts Type → Edit.
| Micro-entity (FRS 105) | Small company (FRS 102 Section 1A) | |
|---|---|---|
| The property is shown at | Cost (less depreciation of the building) | Fair value — what it is worth at the year end |
| Changes in value | Not recognised | Through the profit and loss account each year |
| Deferred tax on the increase in value | Not allowed | Required |
| Notes | A few short notes | An investment property note with the basis of valuation, creditors, deferred tax, related parties |
| Simple Entry | Available | Not available: use the trial balance |
A micro-entity may choose either. FRS 105 is simpler and is fine for many landlords. FRS 102 Section 1A is the choice when you want the balance sheet to show what the property is really worth — for a lender, or because the company has to. Changing the type keeps your trial balance, journals and tax computation if you ask it to; notes and policies are set up again for the new format.
See Changing the accounts type for the detail, and the statutory accounts guide for the formats themselves.
Getting the figures in
For an FRS 105 company, Simple Entry is the quickest route: it has a box for rental income and gives each expense a property share, and the let property goes in with the fixed assets at cost. See Letting property in Simple Entry.
For a fair-value FRS 102 company, enter or import a trial balance. Use the Investment property accounts for the property (not Freehold property, which is depreciated), Rental income for the rents and Fair value gains/losses on investment property for the revaluation. The accounts article lists every line.
The company type on the tax return
The Corporation Tax wizard asks for a Company Type. For a company letting property to ordinary tenants leave it on Not applicable. Two options look tempting and are almost always wrong:
- Close investment-holding company pays the main rate of 25% on every pound of profit, with no small profits rate or marginal relief. A company that exists wholly or mainly to let land to people who are not connected with it is not a close investment-holding company. Letting to the directors, their family or other connected people can change that — take advice if most of your tenants are connected to you.
- Property management company means a company that manages the shared parts of a block of flats for the leaseholders. It is not a company that lets property out.
If the same people control more than one company that carries on a business — two property companies, say — the companies are associated, and the £50,000 and £250,000 limits for the small profits rate and marginal relief are shared between them. Enter the number on the General section of the computation (box 326). See marginal relief.
Next: Accounts for a property company.
Frequently asked questions
Does a buy-to-let company have to file a CT600 every year?
Yes, once HMRC has sent a notice to deliver a Company Tax Return, which it does for any company with income. A company with rents is not dormant, even if it makes a loss.
Should my property company use FRS 105 or FRS 102 Section 1A?
FRS 105 if you are happy to show the property at cost and want the shortest accounts. FRS 102 Section 1A if the property should be shown at its current value. The tax is the same either way: Corporation Tax is not charged on a rise in value until the property is sold.
Does the mortgage interest restriction for landlords apply to a company?
No. The rule that limits individual landlords to a 20% tax credit for finance costs does not apply to companies. A company deducts its interest in full as a loan relationship debit (large groups with more than £2 million of interest a year have a separate restriction).
Does Tax Optimiser handle the Annual Tax on Enveloped Dwellings (ATED) or SDLT?
No. ATED returns and Stamp Duty Land Tax are filed separately with HMRC. Tax Optimiser files the statutory accounts and the Corporation Tax return.
