by House4Students 
With mortgage costs still biting and Renters’ Reform adding new pressures, student landlords need to be more tax-savvy than ever.
One of the biggest strategic decisions is how you hold your property — in your personal name or through a limited company. The right structure can have a huge impact on your income, tax bill, and long-term flexibility.
This blog breaks down the pros, cons, and considerations for 2025.
1. Why Tax Structure Matters More Than Ever
Since Section 24 was fully phased in, individual landlords can no longer deduct mortgage interest from rental income. Instead, they get a basic-rate tax credit — which can leave higher-rate taxpayers paying significantly more to HMRC.
For example:
- Rent: £30,000/year
- Mortgage interest: £18,000/year
- Taxable profit (personal name): £30,000
- Tax due (40%): £12,000
- Credit: £3,600 (20% of £18,000)
- Net tax: £8,400 — even though actual profit is £12,000
If held in a limited company:
- Corporation tax applies to actual profit (e.g. £12,000)
- At 19–25% CT rate = tax of £2,280–£3,000 (a much smaller bite)
Reference: Gov.uk: Section 24 Explained
2. Limited Company vs Personal Name – Key Differences
Limited Company Pros:
- Full mortgage interest relief
- Corporation tax rates lower than higher-rate income tax
- Easier to ringfence profits and reinvest
- More attractive to some lenders
Cons:
- Higher mortgage rates (though gap has narrowed)
- Fewer lender options
- Admin and accountancy costs
- Double taxation if extracting income (e.g. CT + dividend tax)
Personal Name Pros:
- Simpler setup and admin
- No need for separate company accounts or filings
- More lender choice
Cons:
- No mortgage interest relief (Section 24)
- Higher personal tax burden if over basic rate
- Risk of rental income pushing you into a higher tax band
3. What Should You Do?
It depends on your goals:
✅ Go Ltd Co if:
- You’re building a portfolio (2+ properties)
- You want to reinvest profits rather than extract them
- You’re a higher-rate taxpayer
❌ Stay personal name if:
- You’re only letting one property short-term
- You want simple accounting
- You rely on rental income personally
Also consider:
- Stamp duty + CGT if transferring existing properties
- Mortgage availability — lenders differ on acceptable structures
Always get professional tax advice — but don’t assume you’re stuck with your current setup. Many landlords now use both structures strategically.
Final Word
The best structure depends on your income, ambitions, and risk tolerance. But with interest rates and compliance costs rising, the old way of doing things no longer makes sense for everyone.
Even if you’re holding one or two student lets, it’s worth reviewing your setup. The right structure could save you thousands.
