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Tax Changes from Next Week - What Landlords Must Know

Over the last couple of years, the government has made several changes to how income and profits are taxed. Some of these will take effect from the new tax year on April 6 with higher earners and those letting via a limited company most affected.

Here’s a round-up of what you need to know for this year as a landlord and property investor.

 Corporation Tax is rising for companies with profits above £50,000


If you let your properties via a limited company and have annual profits of more than £50,000, you need to be aware that the rates are rising.

Currently Corporation Tax is 19 per cent but this is increasing to 25 per cent from April for companies with profits above £250,000. Profits between £50,001 and £250,000 will be taxed at a graduated rate through marginal relief applied to the 25 per cent rate, while companies making up to £50,000 in profit will continue to be taxed at 19 per cent.

Dividend Allowance reducing

If you receive dividend income from shares, you need to know that the tax-free allowance is being cut from £2,000 to £1,000 for the 2023/24 tax year and then to £500 for the 2024/25 tax year.

Personal Allowance remains at £12,570

While this isn’t a change for 2023, it is a change from the norm. 

Usually, the Personal Allowance goes up each year to reflect inflation in order to maintain the value of the allowance. But to help recoup some of the money spent on the pandemic, the Chancellor froze the Personal Allowance at the 2021/22 level – initially for five years until 2026, which was extended to 2027/8 in last November’s Autumn Statement. 

So, for the third year, the amount you can earn before paying tax in 2023/24 is £12,570. Unfortunately, this means that over the next few years, as the cost of living rises through inflation, the real-world value of your tax-free allowance will continue to fall.

Top rate tax threshold dropping from £150,000 to £125,140

From April, the additional rate tax threshold is dropping to £125,140, and earnings over that level will be taxed at 45p. So those earning over £150,000 will pay 5p more in tax on £24,861 and see their tax bill rise by £1,243.

For more information on allowances, income tax rate, and bands, visit the Gov.UK website. 

Capital Gains Tax annual exempt amount being cut

If you plan to sell property soon, you must budget for the CGT tax-free allowance to drop significantly over the next two tax years.

For 2023/24, it’s being reduced from the current £12,300 to £6,000, in April 2024, it will drop again to £3,000. That means for anyone with gains above the allowance, CGT will be payable on an additional £9,300 by the 2024/25 tax year – that’s an extra £1,674 on the tax bill for basic-rate taxpayers and £2,604 more for those in the higher-rate bracket.

Here’s an example of how your tax bill for a gain of £40,000 would change:

Tax year reported



Tax at 18%

Tax at 28%
















Finally, here’s one more change to be aware of:

Making Tax Digital (MTD) plan amended

This online-only tax filing system was originally due to take effect in April this year for those who earn over £10,000 and submit Self Assessment returns. However, the planned introduction was delayed by a year due to the impact of the pandemic, and then, in December 2022, the Government changed its plans for MTD again.

As it now stands, self-employed individuals and landlords will have to submit quarterly returns to HMRC via MTD-compatible software:

- From April 6 2026 if their annual property or business income is more than £50,000

- From April 6 2027 if they earn between £30,000 and £50,000

A pilot scheme is already underway, so if your income is above £30,000, it might be worth looking into the available software options and speaking to either your financial adviser or a property tax expert to ensure you’re prepared for when the requirement comes into force.

Those earning under £30,000 will not be required to use the MTD system until a Government review has been completed.

It’s essential to protect your rental profits by controlling your costs and aiming to increase your tenants’ rent each year.

* Allison Thompson is National Lettings Managing Director of Leaders Romans Group *

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    Great article, thank you

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    How many of us would have become landlords or expanded our portfolios if we had had any indication of quite how punitive taxation was going to become?

    When I started out we paid standard SDLT, profit was calculated in the same way as for every other business and we had taper relief on CGT. We've never been allowed to enjoy the tax perks everyone else has from contributing to a pension but that used to be OK when we were treated fairly on general taxation.
    Having to constantly adapt our business models to accommodate completely new tax assaults makes any kind of long-term planning impossible.

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    "What landlords must know"......... Things are not going to get better... EVER! Get out whilst you can. 👍

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    And put up the rent to make up the difference

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    Just add Conservative M.P anti-Private landlords Housing Secretary Mr Michael Gove’s Selective Licensing Scheme that he single handed introduced without consultation or
    anything like that a law all to himself and about the Law just like Mayor Khan.
    Selective licensing was as its name suggests Selective and in the past it applied to 2 or 3 wards of a Borough only. That was also the case in April ‘22 when the Scheme was further re-introduced in 3 wards. However smart aleck Mr Gove turned around, interfered and gave permission for Borough wide licensing. Therefore its not Selective at all because its Borough wide.
    There was a 3 month grace period where a 25% early bird discount was available expiring
    The unfairness of it all for people renewing their HMO licenses and have always complied with licensing requirements, there is no discount.
    I think fees for Renewals should be substantially less than the original Application it only a repetition computer button press exercise for Meta street.

    Robert Black

    Interesting that there are courses out there for HMO letting!!

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    The problem is our current government are Tories in name only.
    In fact as much as I hate to say it, this current bunch are more left than Blair and Brown's period.
    Only problem now is neither Labour or Conservatives have enough good guys to sort this country out. I do hope Reform party get going properly for the next election else I just will have nobody to vote for.


    Mike - I have left this comment before on this forum. I have asked Reform on at least 3 occasions to say where they stand re PRS and so far they refuse to answer. I wanted to vote for them too but I am not sure they would be fair towards us either. could you try asking them where they stand?

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    Am I the only one who hasn't heard anything from HMRC about Making Tax Digital?
    Thought they should have notified us by now, in writing, on paper.
    And where was the public consultation they should have done?
    Plus 'stakeholder consultation', well prior to introducing it to us, that such public bodies should carry out?


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