Portfolio landlords are being urged to review their ownership structures ahead of tax changes due to take effect in April 2027, as accountants warn that higher-rate taxpayers will face increased bills on rental profits.
The planned increases will raise the basic rate of income tax from 20 percent to 22 percent, the higher rate from 40 percent to 42 percent, and the additional rate from 45 percent to 47 percent. Finance cost relief will also rise from 20 percent to 22 percent, but this is expected to only partly offset the impact for landlords with mortgage borrowing.
Early action recommended
Jon Chambers, tax director at accountancy firm Price Bailey, said: “We’re seeing portfolio landlords question more than ever whether individual ownership still makes sense. The 2 percent rise, due to come in next year, adds even more financial burden onto existing tax restrictions and regulatory costs coming this year, with many investors reaching tipping point.”
Chambers noted that while the 2 percent increase in basic rate and higher rate dividend tax applies a year earlier – from April 2026 – director shareholders have more flexibility around profit extraction through company structures.
This follows Landlord Knowledge’s February report showing limited company purchases now account for a record 43 percent of buy-to-let transactions, as landlords increasingly favour SPV structures for tax efficiency. The latest guidance suggests that trend may accelerate further ahead of the April 2027 changes.
Succession planning also affected
The April 2026 Business Property Relief cap is also affecting succession planning, pushing many landlords to conduct strategic reviews to determine which properties justify continued ownership. According to Price Bailey, reviewing restructuring opportunities now puts portfolio landlords in a stronger position to handle the coming 12 months.
“Landlords can handle this successfully but waiting until April 2027 means missing restructuring opportunities,” Chambers added. “Early action is the best step landlords can make, to strengthen their position going into the next financial year.”
The guidance comes as recent research showed limited company landlords are 14 percentage points more likely to raise rents than those holding properties in personal names – suggesting the tax efficiency of corporate structures comes with different commercial pressures.
For landlords considering restructuring, the main options include transferring properties into a limited company, though this typically triggers Capital Gains Tax and stamp duty costs. Alternative approaches include selling properties to release capital, or holding existing stock while acquiring future purchases through SPV structures. Professional advice is essential as the optimal approach depends on individual circumstances including portfolio size, mortgage arrangements, and long-term investment plans.
What this means for landlords
- If you hold properties personally with mortgages: The gap between corporate and personal tax efficiency will widen from April 2027 – review your structure now while there’s time to plan.
- Watch for: The April 2026 dividend tax changes hitting first, plus the Business Property Relief cap affecting inheritance planning for larger portfolios.
- Bottom line: Accountants say waiting until April 2027 means missing restructuring windows. Those considering changes should act in 2026.
Editor’s view
The tax squeeze on individual landlords continues to tighten. While transferring to a company structure isn’t right for everyone – the costs can outweigh benefits for smaller portfolios – the direction of travel is clear. April 2027 won’t be the last increase, and landlords who keep deferring structural decisions may find their options narrowing.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 16 March 2026
Sources: Price Bailey
Related reading: Limited company BTL hits record 43% of purchases as SPV trend accelerates
