A quick note: this article is general information, not personal advice. Tax and accounting rules change and everyone's situation is different, so please don't act on anything here without checking how it applies to you. We'd be happy to help — get in touch before making any decisions.
Few groups have had to swallow as much tax change over the past decade as property investors, and 2026/27 doesn't let up. Whether you own a single flat or a sizeable portfolio, these are the points to keep in view.
Section 24 is still the headache
Section 24 stops individual landlords deducting mortgage interest as an expense. In its place you get a 20% tax credit on your finance costs. For higher and additional-rate taxpayers that can mean paying tax on profit you never genuinely earned, and sometimes being tipped into a higher band by rental income measured before interest.
This is the question we hear most: should I hold property personally or through a limited company? Honestly, there's no single right answer. It turns on your other income, how long you intend to hold, and whether you actually need to draw the rents.
Furnished Holiday Lettings: the door has closed
The Furnished Holiday Lettings (FHL) regime was abolished from April 2025, which makes 2026/27 the first full year that former holiday-let owners feel it properly. The perks that made FHLs worth having are gone:
- finance costs now fall under Section 24, exactly like ordinary lettings;
- capital allowances on furniture and fixtures are no longer available in the same way;
- profits no longer count as relevant earnings for pension purposes;
- the Capital Gains Tax reliefs that once applied to FHLs, such as Business Asset Disposal Relief and rollover relief, have gone too.
If you used to run a holiday let, now is a good moment to ask whether your structure still earns its keep.
Capital Gains Tax on residential property
Sell a residential investment property and Capital Gains Tax applies at 18% for gains within the basic-rate band and 24% above it. The annual exempt amount is just £3,000. And don't overlook the 60-day reporting and payment deadline: any CGT on UK residential property has to be reported and paid within 60 days of completion, separately from your tax return. People are caught out by this one all the time.
Making Tax Digital reaches landlords too
From April 2026, landlords with property income over £50,000 come within Making Tax Digital for Income Tax, and the £30,000 threshold follows in April 2027. In practice that means digital records and quarterly updates instead of one tidy annual return.
How we help property clients
We advise landlords on ownership structure, incorporation, profit extraction and capital gains planning, and we take care of the compliance behind it, including the 60-day CGT returns and MTD. If you'd like a clear read on where you stand for 2026/27, book a free consultation with our team.