Budget 2026: what it means for you and your business —
In short
Property is one of the most tax-sensitive areas we advise on. Since 6 April 2026, landlords with gross property income over £50,000 must keep digital records and file quarterly under Making Tax Digital — and the threshold is measured on gross rents before expenses, so a landlord receiving £55,000 of rent with £30,000 of costs is in scope despite modest profit. Add the 60-day CGT deadline and the personal-versus-company question, and property demands specific advice.
Yes — and the detail catches people out badly.
Since 6 April 2026, landlords whose qualifying gross income exceeds £50,000 must keep digital records and submit quarterly updates. The threshold falls to £30,000 in April 2027 and £20,000 in April 2028.
Qualifying income means GROSS rents — before deducting mortgage interest, agent fees, repairs or anything else. A landlord receiving £55,000 in rent with £30,000 of costs has £25,000 of profit and is still in scope.
If you also have self-employment income, the two are added together for the threshold test.
The question that dominates landlord tax, and there is no universal answer.
Personally: simpler, but rental profits are taxed at your marginal income tax rate, and mortgage interest relief is restricted to a basic-rate tax reduction — which pushed many higher-rate landlords into paying tax on income they never actually received.
Through a company: interest is generally deductible in full against profits, and corporation tax rates may be lower than your marginal income tax rate. But extracting the profit costs you again in dividend tax, and transferring an existing portfolio into a company is a disposal — potentially triggering CGT and SDLT on the way in.
For a new purchase, the company route is often attractive. For an existing portfolio, the cost of getting in frequently outweighs the benefit. It must be modelled.
If you dispose of UK residential property at a gain, you must report it and pay the estimated tax within 60 days of completion — separately from your Self Assessment return.
Penalties apply from day 61. This is one of the most widely missed obligations in the tax system, and the fact that you will also declare the gain on your annual return is not a defence.
With the annual exempt amount now just £3,000 and rates at 18% / 24%, the sums involved are significant. Speak to us before you complete.
Development brings its own issues: whether profits are trading income or capital gains (which changes the rate entirely), VAT on new build and conversion, and the treatment of development costs.
SDLT has surcharges for additional properties and for non-residents, with reliefs — multiple dwellings, mixed use — that are frequently either missed or over-claimed. Both errors are expensive. It is worth checking before completion, not after.
This is the point landlords most often get wrong. The £50,000 threshold applies to your gross rental income before any expenses at all — not to what you actually keep. If your rents exceed the threshold, you are in scope regardless of your mortgage, your agent’s fees or your repair bills.
MTD for landlords handled — records and software ready ahead of the deadline.
The 60-day CGT return — the deadline most landlords discover too late.
Personal versus company modelled properly, including the cost of getting in.
Developers as well as landlords — trading versus capital, VAT, SDLT reliefs.
Chartered (ICAEW) advisers across five offices.
This page provides general information about the 2026/27 UK tax year and is not advice on your particular circumstances. Tax and regulatory rules change frequently. Please contact us before acting, or refraining from acting, on anything set out here. LMJ Group is a firm of Chartered Accountants regulated by the ICAEW. LMJ Group is not a registered auditor and does not provide audit services. Last reviewed: July 2026.
