Property taxes

Key considerations for property owners

Property Gains Tax (CGT)

The general rate of CGT rose to 18% for basic rate and 24% for higher rate taxpayers. The current rates apply to the sale of land, commercial and residential property, as well as other assets such as share disposals. The residential in-year CGT reporting, with a 60 day filing deadline and payment regime still applies.

Stamp Duty Land Tax (SDLT)

The SDLT surcharge on second properties rose from 3% to 5% for purchases with an effective date (usually the date of completion) on or after 31 October 2024. This surcharge applies to those purchasing either a second home or a property to rent out. This is in addition to the extra 2% surcharge for non-resident individuals.

First time buyers and 0% band

The temporary SDLT holiday expired on 31 March 2025, which now means that reduced SDLT thresholds no longer apply and the 0% band has reverted to £125,000.

Making Tax Digital (MTD)

MTD is on track to be introduced for landlords with property income over £50,000 from April 2026, with the turnover reducing to £30,000 from April 2027, and then £20,000 from April 2028. Those landlords who are likely to meet the criteria from April 2026 need to take advice on how they manage the new requirements.

Furnished Holiday Lets (FHL)

The FHL rules were abolished from 6 April 2025. This is likely to increase both the income tax and CGT payable by property owners. For FHLs owned jointly and not splitting the rental income equally with their partners, may need to make elections to ensure the property income is split in their commercial proportions. It is vital those who held FHLs seek advice.

Property ownership type

Landlords should continue to review whether property should be owned personally or via a company to help identify what is appropriate. Often a company will be a family investment company which can provide, in the right circumstances, both IHT and income tax benefits.

Key considerations for business owners

National Insurance (NI)

There was an increase in employers’ NI contributions from 13.8% to 15% from April 2025, with a decrease to the threshold employers’ commence paying NI contributions from £9,100 to £5,000.

Corporation Tax

The corporation tax rate remains unchanged at 25% with a small companies rate of 19%. A roadmap for the future of corporation tax was published which sets an expectation of long-term stability. This will be of comfort to those trading through companies.

Annual Tax on Enveloped Dwellings (ATED)

For those with companies holding residential property, ATED needs to be considered. While there are many reliefs available for businesses, the filing deadline for a return (including returns to claim relief) and the payment due date is coming on 30 April 2025.

Inheritance Tax (IHT)

Agricultural Property Relief and Business Property Relief are planned to change from 6 April 2026. In addition to existing nil-rate bands and exemptions, the 100% IHT relief will now include a cap. The relief will apply to the first £1 million of combined agricultural and business property and then will reduce from 100% to 50% thereafter. Those passing businesses to their successors on death worth more than their nil rate bands and the £1 million cap will now face a IHT charge. 

Capital Gains Tax (CGT)

If a business is sold, then the gain made will be subject to the general rate of CGT, which is now at 18% for basic rate and 24% for higher rate taxpayers. The gain often qualifies for Business Asset Disposal Relief (BADR), which reduces the rate from 24% to 14% for gains from 6 April 2025, and 18% from 6 April 2026 for gains up to £1 million. The lifetime limit for investors relief, which may also be available to reduce the tax rate on share disposals, was reduced from £10 million to £1 million on 30 October 2024.

You can read our Spring Statement update in full. For further information, please contact Mark Stemp or your usual Crowe contact.