Residential Properties
Residential landlords are facing a significant shift in the tax landscape over the next couple of years. Here’s more information if you’ve not already looked into it.
From April 2027, we will see a two percentage point increase in the income tax rates specifically for rental income. This means basic rate taxpayers will move to 22%, while those in the higher and additional bands will face 42% and 47% respectively.
When you combine this with the existing restrictions on mortgage interest relief, the gap between taxable profit and actual cash flow is set to widen further. For those with highly leveraged portfolios, the pressure on margins will be increased.
You may be wondering whether holding property personally still makes sense.
Incorporation (moving your properties into a limited company) is often the first thing people suggest, and for some, the ability to fully deduct mortgage interest and access lower corporation tax rates is a clear advantage. However, it is rarely a simple decision.
Moving property into a limited company can trigger significant upfront costs in Stamp Duty and Capital Gains Tax, not to mention the need for lender consent.
For smaller portfolios, or for those who rely on rental income for their day-to-day living, a full restructure might not be the answer. With those clients, we are instead looking at more immediate planning:
- Reviewing how income is split between spouses to utilise lower tax bands.
- Ensuring every penny of capital enhancement is recorded to manage future CGT.
- Stress-testing cash flow against the 2027 rate rises.
With these changes starting in 2027, and a new surcharge for higher-value homes following in 2028, it is an important time to review your property portfolio. Some people will understandably want to put their head in the sand. But taking the time to model your specific numbers today will put you in a much stronger position than waiting for the tax bills to arrive.
If you haven't reviewed your portfolio structure recently, reach out to us to start that conversation.
Supporting the Next Generation Through Work Experience
We are always pleased to support young people as they begin exploring their future careers, and it has been a pleasure to welcome three work experience students into the office over the past month.
During their placements, the students spent time with colleagues across a range of departments, including accounts, audit, personal taxation and company secretarial services. This gave them the opportunity to see first-hand how different areas of the firm work together and to gain a better understanding of the variety of career paths available within the profession.
A particular highlight for our students is always the chance to observe real client meetings. These experiences help bring the work to life and provide valuable insight into the importance of building strong professional relationships.
We would like to thank our clients who kindly welcomed students to sit in on meetings, as well as everyone in the team who took the time to share their knowledge and support them during their placement. We hope the experience has been both informative and inspiring as they consider their next steps.
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Kingswood
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Joshua Bearn Director
- August 19, 2026
- 01302 349218
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