Property and capital gains tax

Landlords with one property or twenty, people selling a second home or an investment property, and anyone weighing up whether to hold property personally or through a company.

Personal ownership or a company

The restriction on finance cost relief for individual landlords changed the arithmetic considerably. Higher-rate taxpayers with mortgaged property often find a corporate structure more efficient — but incorporating an existing portfolio can trigger capital gains tax and stamp duty of its own, so it is not automatically the right move.

This is a calculation, not a rule of thumb. We do the numbers for your actual position before recommending anything.

What is actually allowable

Repairs are deductible; improvements are not, but they may reduce a future capital gain. Replacement of domestic items has its own relief. Travel, professional fees, insurance and letting agent costs all have their own treatment.

Getting the repair-versus-improvement line right is where most landlords either overclaim and risk an enquiry, or underclaim and overpay.

Making Tax Digital for landlords

Landlords are now part of Making Tax Digital for Income Tax. If your gross rental income, added to any self-employment turnover, is over £50,000, you must already keep digital records and send HMRC quarterly updates. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. We set this up for you and handle the updates each quarter.

Capital gains on disposal

UK residential property gains must be reported and the tax paid within 60 days of completion, separately from your self assessment return. Missing it produces a penalty even if the tax was eventually paid.

Before a sale there is usually planning worth doing: timing across tax years, use of the annual exempt amount, transfers between spouses, and whether any private residence relief applies for a period you lived there.