1. The First Step: Choosing Your Structure
Entering the United Kingdom property market is exciting, but the first key decision every new investor faces is what structure you’ll use to buy and hold the property — personally, through a UK Limited company, or through your existing Dutch holding company.
For Dutch investors, this choice affects both the UK tax position and the Dutch tax treatment.
Making this decision early can save time, tax, and legal work later.
2. Buying in Your Personal Name (Private Ownership)
If you buy property in your own name while living in the Netherlands, you are treated as a non-resident landlord in the UK.
You must report and pay tax on your UK-source rental profit (rent minus allowable expenses such as maintenance, letting fees, insurance, and part of the mortgage interest).
The standard UK Income Tax rates apply — 20 percent, 40 percent, or 45 percent — based only on your UK-source rental income.
Your Dutch income is not included in this calculation.
HMRC looks only at the profit earned from your UK property.
Because of Section 24 of the UK Finance Act, you cannot deduct the full amount of mortgage interest as an expense.
Instead, you receive a 20 percent tax credit on the interest amount.
When you sell the property, you may also pay Capital Gains Tax in the UK on any profit.
3. How the Netherlands Treats Personal Ownership
The Netherlands sees your UK property as a foreign investment in Box 3 (savings and investments).
You do not pay Dutch Income Tax on the rent itself, but you pay a wealth tax based on the property’s net value (market value minus mortgage).
The double-tax treaty between the Netherlands and the UK prevents double taxation, so you receive credit for UK tax already paid.
4. Buying Through a UK Limited Company (SPV)
Some investors prefer to buy through a UK Limited Company, often called a Special Purpose Vehicle (SPV).
The company becomes the legal owner of the property, and you own the company’s shares.
In the United Kingdom
The company pays Corporation Tax on its profit after deducting all allowable business expenses, including mortgage interest, refurbishment costs, and professional fees.
Since April 2023, the UK uses a two-tier system with marginal relief:
· 19 percent for profits up to £50,000 (the small-profits rate),
· 25 percent for profits above £250,000 (the main rate),
· Between £50,001 and £250,000, the effective rate gradually increases from 19 to 25 percent through marginal relief.
This means smaller property companies usually pay between 19 and 23 percent Corporation Tax in practice, depending on profit.
HMRC automatically applies marginal relief when the return is filed.
Because the company is treated as a trading business, all mortgage interest and operating costs are fully deductible — one of the main advantages compared with personal ownership under Section 24.
In the Netherlands
From a Dutch perspective, you do not own the property itself; you own shares in a foreign company.
How these shares are taxed depends on the size of your holding.
Box 2 – Substantial Interest (more than 5 percent)
If you hold more than 5 percent of the shares, this is a substantial interest (aanmerkelijk belang).
· The shares fall under Box 2 of your Dutch tax return.
· You pay Dutch tax only when you receive dividends or sell the shares.
· The Box 2 rate is 26.9 percent (2025).
· No annual wealth tax applies while profits remain inside the company.
Box 3 – Savings and Investments (5 percent or less)
If you own 5 percent or less, the shares are part of your general wealth in Box 3.
· You pay annual wealth tax on a deemed return.
· You are taxed even if you receive no dividend.
· The effective rate depends on your total Box 3 assets.
| Situation | Dutch Tax Box | When Tax Is Due | Typical Rate |
| Own > 5 % of shares | Box 2 | When dividends / sale | 26.9 % (2025) |
| Own ≤ 5 % of shares | Box 3 | Annually | Depends on Box 3 formula |
5. Buying Through a Dutch Holding BV
If you already have a Dutch Holding BV (Besloten Vennootschap), you can place your UK Limited under that BV instead of owning it personally.
How It Works
· The Dutch Holding BV owns the shares in the UK Limited.
· The UK Limited buys and manages the UK property.
· The UK Limited pays Corporation Tax on its profit in the UK.
· After tax, it can pay a dividend to the Dutch BV.
Tax Position
· The Dutch BV benefits from the participation exemption (deelnemingsvrijstelling) if it owns at least 5 percent and meets the substance requirements.
· This means dividends from the UK Limited are usually tax-free in the Netherlands.
· The Dutch BV pays Dutch tax only when it distributes dividends to you personally (Box 2 – 26.9 percent).
Points to Watch
· The Dutch tax authority will look at management and control.
If the UK Limited is effectively managed from the Netherlands, it could become Dutch tax resident.
· The structure adds administration: both entities must file accounts and comply with their national regulations.
· The UK-NL tax treaty prevents double taxation, but proper documentation is essential.
6. Comparing the Three Routes
| Aspect | Personal Name | UK Limited (Private) | UK Limited via Dutch Holding |
| UK Tax | Income Tax (20–45 %) | Corporation Tax (19–25 %) | Corporation Tax (19–25 %) |
| Dutch Tax | Box 3 (wealth) | Box 2 if > 5 % / Box 3 if ≤ 5 % | Participation exemption → Box 2 when paid out |
| Interest Deduction | Limited (Section 24) | Fully deductible | Fully deductible |
| Reinvestment | Difficult | Within UK Ltd | Across group (BV + Ltd) |
| Administration | Simple | Moderate | Higher (cross-border filings) |
| Best For | One property | Active portfolio | Established BV owners |
7. Key Considerations
· If you plan one small investment, buying personally is fine.
· If you plan to build a portfolio, a UK Limited often fits better.
· If you already have a Dutch BV, placing the UK Limited under it can optimise control and deferral.
· Always align with both a UK and Dutch accountant before acting.
8. Section 24 – Why It Matters
If you buy in your personal name, Section 24 limits how much mortgage interest you can deduct.
This change makes many investors choose a company structure instead.
9. How GD2 Ltd Helps
At GD2 Ltd we guide international investors — especially from the Netherlands and Belgium — through their first steps in the UK market.
We coordinate with trusted accountants and solicitors in both countries to make sure your structure is practical, compliant and scalable.
Our process
1. Clarify your investment goal and growth plan.
2. Compare ownership models with tax impact and setup cost.
3. Connect you with qualified UK and Dutch advisers.
4. Build your first project datasheet and ROI analysis.
Ready to explore your structure? Contact GD2 Ltd to discuss your plan and start your UK investment journey with clarity and confidence.
Important Notice
We are not authorised to give financial or tax advice.
The information on this page is based on our own experience as international investors and is provided to help you understand the general options available.
Always consult a qualified accountant or tax adviser before making investment decisions.
