Cambridge Rental Limited Company vs Personal Ownership: Pros and Cons

As the tax landscape continues to shift, more landlords in Cambridge are asking the same question: should I hold my buy-to-let property in a limited company—or in my personal name? With mortgage interest rules changing and long-term strategy in focus, the answer isn’t always straightforward. Whether you own a single flat or are growing a portfolio, understanding how ownership structure impacts your profit and management is essential in 2025.

Why Landlords Are Asking This in 2025

In recent years, the government has phased out mortgage interest tax relief for personally owned buy-to-lets. Instead of deducting mortgage interest from rental income, individual landlords now receive a basic rate tax credit—often resulting in a significantly higher tax bill for higher-rate taxpayers.

Meanwhile, the incorporation trend has accelerated. Limited company ownership allows for full mortgage interest deductibility as a business expense, which can dramatically affect net profit. Combine that with increasing property values in Cambridge and tighter margins due to interest rates, and landlords are rightly reviewing their structures.

Pros of Limited Company Ownership

The most obvious benefit of holding property in a limited company is full mortgage interest deductibility. This means landlords can offset the entire interest cost against rental income before paying tax, improving cash flow.

Company profits are taxed at the corporation tax rate, currently 19%–25% depending on earnings, which is generally lower than personal income tax rates (which can reach 40%+ for high earners). This structure also supports long-term portfolio growth—allowing retained profits to be reinvested without triggering personal tax.

For landlords planning to build a multi-property portfolio or eventually pass assets down via shares or trusts, company ownership can offer more flexibility.

Cons and Hidden Costs

While tax advantages are appealing, limited company ownership comes with additional costs and complexity. Buy-to-let mortgage rates for companies are typically 0.5%–1% higher than for personal loans. Product choice is also more limited.

There’s more admin and ongoing cost: companies must file annual accounts, maintain statutory records, and often pay for specialist accounting advice. These services can cost anywhere from £800 to £2,000 per year depending on the portfolio size.

Selling a property from a limited company can also be more complicated. Unlike personal ownership, where capital gains tax is calculated on the individual, company-held assets may be subject to double taxation—first at the corporate level, then again if profits are withdrawn.

Cambridge Landlord Scenarios

So, when does it make sense for Cambridge landlords to own via a limited company?

• Portfolio landlords with 3 or more properties and long-term buy-and-hold plans will often benefit from the tax and structural advantages.

• Landlords in higher tax bands, especially those already exceeding their personal allowance and base-rate threshold.

• Investors planning to expand into high-yield areas like CB4 (HMO conversions) or new-build flats to let in Cambridge UK.

But company ownership isn’t always the right choice. For:

• Accidental landlords (e.g. inherited property or single-flat owners),

• Landlords with only one or two units who don’t plan to scale,

• Or those in basic tax brackets with minimal mortgage interest,

…it often makes more sense to keep things simple and stay in personal ownership.

Letting agents Cambridge work with regularly advise clients on the operational pros and cons of each model—including how each affects property management, compliance, and income flow.

Transitioning to a Company

Switching from personal ownership to a limited company isn’t free. Transferring an existing property triggers capital gains tax and stamp duty, as the company is treated as a separate legal entity.

Some landlords set up companies only for new purchases. Others restructure by selling to the company, using incorporation relief in limited scenarios. Either way, talk to an accountant before making the move.

Also, make sure your Cambridge property letting agency understands how to handle rent collection, compliance, and expense tracking for limited company landlords—it's not business as usual.

Choose Structure Strategically

There’s no one-size-fits-all answer when it comes to how you hold your Cambridge rentals. Tax efficiency, long-term plans, and admin burden must all be weighed carefully.

Cambridge Stays offers expert guidance on how ownership structure impacts property management, compliance, and profitability. Request a free landlord consultation and explore what model fits your goals.