Understanding Your Obligations and Opportunities as a Landlord or Investor
Property has long been a favoured investment in the UK, but it comes with a complex and often frustrating tax landscape. Whether you’re renting out a single flat or managing a multi-million-pound portfolio, getting your property tax strategy right can make a substantial difference to your profitability, compliance, and long-term financial goals.
At P10 Financial, we specialise in providing landlords, developers, and property businesses with clear, strategic advice on managing property tax, from day-to-day rental income to long-term planning around Capital Gains, Inheritance Tax, and incorporation.
What Taxes Do I Pay on Investment Property?
Depending on how your property is owned, personally or through a company, different taxes apply. Here's a breakdown:
Owning Property Personally:
Income Tax: Rental profits are taxed at your marginal rate (20%, 40%, or 45%). Since 2020, mortgage interest is no longer fully deductible but replaced by a 20% tax credit.
Capital Gains Tax (CGT): When you sell a property that has increased in value, you may pay 18% (basic rate taxpayers) or 24% (higher/additional rate) on the gain.
Stamp Duty Land Tax (SDLT): A 3% surcharge applies on second homes and buy-to-let purchases.
Inheritance Tax (IHT): Property forms part of your estate and may be taxed at 40% if not planned for correctly.
Owning Property Through a Limited Company:
Corporation Tax: Rental income is taxed at 25%, but mortgage interest and allowable expenses are fully deductible.
Dividend Tax: If you extract profits, you’ll also pay personal dividend tax (8.75%–39.35%).
Capital Gains: Gains on sales are taxed at the corporate rate (25%).
SDLT: Companies still pay the 3% surcharge and may trigger a 15% flat rate on certain high-value purchases.
Should I Own Property Personally or via a Company?
There’s no one-size-fits-all answer. The right approach depends on:
Your income level
Number of properties
Future growth plans
Your exit strategy (sale, refinance, hold)
Succession planning needs
P10 Financial runs side-by-side tax modelling to compare personal vs. corporate ownership, helping you make the right decision based on real numbers and real goals.
Can I Reduce My Property Tax Bill?
Absolutely, with the right planning. Common tax-saving strategies include:
Capital Allowances: Claim on commercial property purchases and refurbishments.
Income Splitting: Distribute rental income to lower-earning family members or spouses.
Business Property Relief (BPR): Available in specific property business or development structures.
Using Trusts: For inheritance tax planning and flexible asset control.
SIPP & SSAS Pension Schemes: Tax-efficient routes for commercial property investment.
Tax Deductibles: Maximise your eligible expenses, especially if operating through a company.
We tailor your tax strategy based on your income, goals, and property mix.
Structuring Your Property Portfolio
The structure of your portfolio affects everything from financing to tax to exit flexibility. We help clients build and restructure portfolios that are:
Tax-efficient
Lender-friendly
Scalable
Compliant
We advise on:
Incorporation (and whether it’s right for you)
SPVs (Special Purpose Vehicles) for developments or joint ventures
HoldCo-OpCo structures for risk management
Trusts for succession
Mixed portfolios across commercial, residential, and international assets
How P10 Financial Can Help
Our property tax and structuring specialists work across the entire lifecycle of property ownership. We’re here to help you:
Understand your current tax position
Reduce your tax burden, legally and ethically
Incorporate or restructure portfolios
Navigate SDLT, CGT, IHT, and more
Plan your long-term property strategy
Whether you’re a first-time landlord or managing hundreds of units, we’ll give you clear advice, real-world numbers, and a tailored strategy to protect your income and grow your wealth.
