Caroline Foulger highlights the property income tax increase for residential landlords in Business & Accountancy Daily
Caroline’s comments were published in Business & Accountancy Daily, 21 January 2026, and can be seen here.
Caroline Foulger, Partner in our Private Client department, highlights the impact of the forthcoming 2% increase in property income tax rates from April 2027, set against a backdrop of sustained regulatory and financial pressure on residential landlords.
While the headline rise is modest, she explains that it comes at a time when many landlords are already facing reduced profitability due to higher mortgage costs, restrictions on interest deductibility, and increased administrative burdens.
She notes that, in isolation, the tax increase is unlikely to be the decisive factor driving landlords out of the sector. However, when combined with recent reforms such as Making Tax Digital, the abolition of the furnished holiday lettings regime, and proposed tenancy law changes, it contributes to a cumulative strain that is prompting many landlords to reconsider their long‑term investment strategies.
Caroline also explores whether incorporation offers a viable alternative. Through comparative analysis, she demonstrates that incorporation may deliver limited tax benefits for landlords with smaller portfolios or modest income levels. In contrast, incorporation may be more advantageous for landlords with larger or more heavily geared portfolios, higher marginal tax exposure, or long‑term objectives to retain profits within a corporate structure, particularly for succession planning purposes.
Ultimately, Caroline concludes that there is no one‑size‑fits‑all solution. While the 2% increase adds pressure to an already challenging environment, decisions around incorporation or exit should be informed by each landlord’s personal circumstances, income profile, borrowing arrangements, and long‑term goals. Professional advice is essential to ensure tax efficiency, regulatory compliance, and effective wealth and succession planning.
Read the full article on the Business & Accountancy Daily [subscription required].