Why Structure and Tax Planning Matter

Too many UK property investors leave significant money on the table — not through any wrongdoing, but through a simple lack of understanding of how the tax system works. The UK framework isn't designed to punish landlords; it rewards those who plan carefully, document properly, and structure intelligently.

This guide draws on over 20 years of hands-on experience advising landlords, developers, and family offices across the UK and overseas. Each section is written to give you practical, experience-based guidance rather than generic commentary — covering everything from choosing an ownership vehicle to navigating HMRC's Making Tax Digital regime and planning your estate.

Whether you manage a single buy-to-let or a multi-company development pipeline, the same principles apply: clarity of structure, discipline in record keeping, and foresight in planning.

Felix N. Fualefac, FCCA, MBA, MCIPD

Founder of Felix & Co Accountants Ltd. Over 20 years of experience advising property investors, developers, and family offices on tax-efficient structuring, HMRC compliance, and generational wealth planning. Specialisms include Let Property Campaign disclosures, SPV structuring, and ownership structure analysis.

What This Guide Covers

Fifteen chapters, each addressing a real question Felix hears from landlords and investors every week.

Chapter 1

Personal, Company, or LLP?

How the 2025 tax framework changes the maths on ownership structure — and why the answer depends on what you're building.

Chapter 2

Allowable Expenses

Every deductible cost category under the "wholly and exclusively" test, from repairs and insurance to finance costs and the £1,000 property income allowance.

Chapter 3

Paying Yourself

Salary, dividends, and pension contributions — and how to sequence them for maximum take-home with minimum tax leakage.

Chapter 4

Incorporating Your Portfolio

When Incorporation Relief under s.162 TCGA 1992 can defer CGT, and how SDLT partnership relief interacts with it.

Chapter 5

VAT and Property

The difference between exempt, zero-rated, and opted-to-tax supplies — and why getting this wrong can cost thousands on a single development.

Chapter 6

SPVs and Development

Why each development deserves its own entity, how SPV taxation works in practice, and how to extract profits cleanly.

Chapter 7

Records and MTD

What HMRC requires, the MTD income-tax thresholds from April 2026, and the digital systems worth adopting now.

Chapter 8

Reducing Stamp Duty

MDR, mixed-use classification, TOGC provisions, and every legitimate relief worth exploring before you exchange contracts.

Chapter 9

Pensions and Property

SSAS vs SIPP — how to use a pension to buy commercial property and generate rent inside a tax-privileged wrapper.

Chapter 10

Advanced Structures

Holding companies, Family Investment Companies, LLP joint ventures, and hybrid group models for serious portfolio builders.

Chapter 11

Inheritance Tax Planning

Nil-rate bands, Business Property Relief, lifetime gifting, and how company structures make generational transfer more efficient.

Chapter 12

Portfolio Demergers

How to split shared portfolios between partners without triggering CGT or SDLT — and why HMRC clearance matters.

Chapter 13

SA and HMO Tax

Why serviced accommodation is taxed as trading income while HMOs sit within the property-income rules — and what each means for you.

Chapter 14

Furnished Holiday Lets

The qualification tests, capital allowances, Business Asset Disposal Relief at 10%, and VAT exposure once turnover passes £90,000.

Chapter 1

Should I Buy Property in My Own Name, a Company, or an LLP?

Ownership structure shapes every downstream decision: your tax rate, your mortgage options, how you pass wealth to family, and how easily you can refinance. Getting it right at the start costs almost nothing. Changing it later — after a portfolio has grown — can trigger CGT, SDLT, and significant professional fees.

The 2025/26 Tax Landscape

The maths changed substantially when the 20% finance-cost restriction arrived for individual landlords. In 2025, higher-rate taxpayer landlords with significant mortgage debt often find company ownership materially more efficient:

Factor Personal Ownership Limited Company LLP
Tax on profits 20–45% income tax 19–25% CT + dividend tax on extraction Members' personal tax 20–45%
Interest relief 20% tax credit only Fully deductible Deductible if business activity proven
Reinvestment potential Limited — profits taxed personally Strong — retained pre-dividend Taxed on members annually
Succession planning Complex, CGT-prone Shares transferable flexibly New members easily added
Administration Low Moderate–high Moderate

Personal Ownership

Still the right call for landlords with one or two properties, modest gearing, and short-term income goals. No Companies House filings, no statutory accounts, direct income access, and better mortgage availability. The downside is a hard ceiling: rental profits above £50,270 face 40–45% tax, and you can only claim a 20% credit on mortgage interest, not a full deduction.

Limited Company

The main rate of corporation tax is 25% for profits above £250,000 and 19% for profits under £50,000. Full interest deductibility means a company can retain far more after financing costs than an individual landlord in the higher-rate band. The key trade-off is that profits are taxed again when you extract them — dividend tax at 8.75%, 33.75%, or 39.35% depending on your personal income — plus additional compliance costs and fewer mortgage lenders.

For long-term investors reinvesting within a portfolio, a company is usually superior. See our detailed guide on property ownership structures in the UK and maximising tax savings via a limited company for a deeper comparison.

Limited Liability Partnership

An LLP suits joint investors or families who want profit-sharing flexibility and a clear bridge to future incorporation. Profits are taxed directly on members, so personal rates apply — but the LLP structure allows you to establish a genuine partnership track record that later supports both Incorporation Relief (deferring CGT on transfer to a company) and SDLT partnership relief. Many investors start here and incorporate once the portfolio is large enough to make corporate ownership compelling.

Start with the end in mind. The structure you choose today determines how easily you can borrow, grow, and eventually pass on your wealth. Choose flexibility over convenience.
Chapter 2

What Expenses Can I Legally Claim as a Property Investor?

Claiming every allowable expense is the simplest, most reliable way to reduce your tax bill. HMRC allows deductions for costs incurred "wholly and exclusively" for the purpose of letting. That phrase sounds simple — it creates more disputes than almost any other rule in property taxation.

Key Deductible Categories

Repairs and routine maintenance are deductible; improvements are capital and generally are not. Replacing a broken boiler like-for-like is a repair. Upgrading to a high-efficiency system that materially improves the property may be capitalised. The distinction matters not just for current-year tax but for CGT calculations when you eventually sell.

Other deductible costs include building and contents insurance, letting-agent and management fees, legal fees for tenancy renewals under one year, accountancy fees related to the letting business, utilities and council tax where paid by the landlord, and advertising costs. Travel to inspect your property is claimable; commuting to your day job is not.

Finance Costs — the Most Misunderstood Rule

Individual residential landlords cannot deduct mortgage interest directly. They receive a basic-rate tax credit of 20% on finance costs instead — significantly worse for higher-rate taxpayers. Companies retain full deductibility. This asymmetry is the single biggest driver behind the shift toward corporate ownership since 2020.

Capital repayments of the mortgage are never deductible. Only the interest portion qualifies for the credit.

Property Income Allowance

If your gross rental income is £1,000 or less, it's tax-free. If you use this allowance, you can't simultaneously claim other expenses for that income stream. For most landlords with meaningful costs, claiming actual expenses is more beneficial — but the allowance is worth knowing for very small lettings.

Don't wait until year-end to hunt for receipts. Use accounting software or a simple digital folder to record expenses as they occur. A missed £1,000 expense could cost you £250 or more in extra tax — so stay organised from day one.

For a comprehensive breakdown of every deductible category, see our property investor allowable expenses guide.

Chapter 3

How Should I Pay Myself From My Property Company?

Once a company is generating profit, the extraction decision has a direct impact on how much tax you pay. Most property company directors use a combination of three routes — salary, dividends, and pension contributions — and the right mix depends on your marginal rate, your portfolio's growth stage, and how much cash you actually need.

Salary

A salary up to the personal allowance (£12,570 in 2025/26) is tax-efficient: the company deducts it before corporation tax, your personal income tax on it is nil, and you retain National Insurance eligibility for the state pension. Beyond £12,570, employer and employee NICs kick in and make salary a relatively expensive extraction method for higher earners.

Dividends

After the company pays corporation tax and has distributable reserves, you can declare dividends. The 2025/26 allowance is £500 tax-free. Above that, you pay 8.75% as a basic-rate taxpayer, 33.75% as a higher-rate taxpayer, or 39.35% as an additional-rate taxpayer. Crucially, dividends carry no National Insurance — making them more tax-efficient than salary above the personal allowance threshold, so long as the company has actually paid corporation tax on the underlying profit.

Pension Contributions

Employer pension contributions from the company are fully deductible against corporation tax (subject to the "wholly and exclusively" test and annual allowance limits of £60,000 for 2025/26). They don't create an immediate personal tax charge. For anyone who doesn't need the cash now, routing profit into a pension is typically the most tax-efficient extraction route available. See Chapter 9 for how those pension funds can then be used to buy commercial property.

Practical reminder: Dividends must be supported by board minutes, even if you're the sole director. Payments without adequate distributable reserves are unlawful dividends — HMRC treats them as salary and charges NIC accordingly.

For a step-by-step approach to the most efficient extraction strategy for the 2025/26 tax year, read our property company extraction guide.

Chapter 4

Can I Transfer My Properties into a Company Without Paying Tax?

In law, transferring properties from personal ownership to a company is a disposal at market value — which immediately raises both CGT and SDLT. Without reliefs, this can make incorporation prohibitively expensive. With reliefs, it can be structured with significantly reduced immediate tax.

Incorporation Relief (s.162 TCGA 1992)

If you transfer a property business — not merely a passive investment — to a company in exchange for shares, Incorporation Relief defers the capital gain. The gain is rolled into the cost of the shares you receive rather than being taxed immediately.

HMRC's threshold for what counts as a "business" rather than passive ownership is meaningful. Following Ramsay v HMRC [2013], the activity typically needs to involve multiple properties, substantial time (usually 20+ hours per week), and active management beyond collecting rent. An LLP that has operated as a genuine property business is usually in a stronger position to claim relief than an individual with a small portfolio.

Example: Deferring a £400,000 Gain

If your portfolio was purchased for £600,000 and is now worth £1,000,000, the potential CGT is on a £400,000 gain. Under Incorporation Relief, no CGT is payable at the point of transfer. Instead, your shares in the new company have a base cost of £600,000 — the gain is embedded and becomes taxable only when you eventually sell the shares or wind up the company.

SDLT Considerations

The company still acquires property and SDLT is normally due on market value. However, Schedule 15 FA 2003 SDLT partnership relief may eliminate this charge if your property activity is genuinely operated as a partnership — evidenced by SA800 partnership returns, a joint bank account, and documented management. Get this wrong and full SDLT (including the 3% surcharge) applies.

Incorporation isn't about escaping tax — it's about timing it. Always document your business activity, partnership arrangements, and valuations before the transfer so HMRC sees the same story you do.

Full detail on the transfer process, director's loan mechanics, and post-incorporation accounting is in our company transfer guide.

Chapter 5

VAT and Property — When Does It Apply?

Residential lettings are exempt from VAT, which means no VAT on rental income but also no recovery of VAT on related expenses. That's straightforward. The complexity starts in three places: new-build residential construction (zero-rated, meaning full input-VAT recovery), commercial property (standard-rated unless exempted or not yet opted), and mixed-use developments where partial exemption calculations determine how much VAT you can claw back.

The Option to Tax

Commercial property more than three years old is exempt by default. By submitting form VAT1614A, you opt to tax — converting future lettings and sales into standard-rated supplies and recovering input VAT on costs. This is particularly useful when your tenants are VAT-registered and can recover the VAT themselves. If tenants are not VAT-registered (charities, small businesses, medical practices), charging VAT makes your rent less competitive and the option may not be worth taking.

Transfer of a Going Concern

When acquiring a property rental business with tenants already in place, the Transfer of a Going Concern (TOGC) provisions can take the sale entirely outside VAT scope — improving cash flow and avoiding SDLT being calculated on a VAT-inclusive consideration amount. Both buyer and seller must be VAT-registered, and the buyer must continue the same business. Missing any one condition invalidates the relief.

VAT planning isn't just about recovery — it's about structure. Decide early whether your project will be exempt, zero-rated, or opted to tax, and align every supplier and contract accordingly. Get it right before the first invoice.

See the full VAT and property UK guide for detail on partial exemption calculations, serviced accommodation VAT treatment, and conversions.

Chapter 6

How Should I Structure Property Development Projects and SPVs?

Running multiple developments through a single company means one failed project can jeopardise everything else. A Special Purpose Vehicle — a company created solely to carry out one development — ring-fences that risk. Each SPV holds its own assets, has its own bank account, and is assessed independently for VAT and corporation tax.

Trading vs Investment

If the SPV sells the completed development, the gain is trading income (corporation tax). If it holds the property for long-term letting, the asset is capital and profits are rental income instead. Blurring this distinction creates complications across VAT, CGT, and relief eligibility — so establish the intent clearly before the project begins.

For full guidance on setting up and managing SPVs, including profit extraction and winding-up options, see our SPV structure guide.

Chapter 7

Records and Making Tax Digital — What Changes in April 2026?

From 6 April 2026, MTD for Income Tax Self Assessment becomes mandatory for individuals with annual gross self-employment or property income above £50,000. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.

What MTD Requires

Under the new regime, affected landlords must maintain digital records using HMRC-compatible software, submit quarterly updates to HMRC summarising income and expenses, file an End-of-Period Statement at year end, and replace the traditional self-assessment return with a Final Declaration. Spreadsheets without a proper "digital link" to the submission system will not comply.

Compatible software options include QuickBooks Online, Xero, and FreeAgent. Getting these in place now — rather than rushing before the deadline — also improves day-to-day financial visibility across the portfolio.

Start treating your records like assets, not chores. The investor who maintains accurate, digital books knows exactly where every pound is earned, spent, and saved — and that clarity is worth more than any last-minute tax deduction.

For a full breakdown of the MTD thresholds, exemptions, and compatible software, see our April 2026 MTD landlord guide and our five things landlords need to know about MTD.

Chapter 8

How Can I Legally Reduce Stamp Duty on Property Purchases?

SDLT is one of the largest upfront costs in property acquisition. From 1 April 2025, the temporary thresholds introduced in 2022 reverted to pre-2022 levels. Additional-dwelling buyers pay a 3% surcharge on top of standard residential rates; non-residents add a further 2ohm.

Current Residential SDLT Rates (from 1 April 2025)

Portion of Property Price (£) Standard Rate Additional Dwelling (incl. surcharge)
Up to 125,0000%3%
125,001 – 250,0002%5%
250,001 – 925,0005%8%
925,001 – 1,500,00010%13%
Over 1,500,00012%15%

Key Reliefs Worth Examining

Mixed-use classification is frequently overlooked. A building with a ground-floor commercial unit and flats above can qualify as mixed-use, attracting significantly lower rates and no 3% surcharge. Multiple Dwellings Relief (MDR) is available when buying more than one dwelling in a single or linked transaction — SDLT is calculated on the average price per unit rather than the total, subject to a 1% minimum. The 3% surcharge on a replacement main residence can be reclaimed if the old home is sold within three years of purchase.

SDLT returns must be filed and paid within 14 days of completion. Overpayments can be reclaimed within 12 months of the filing date — professional reviews of past transactions regularly surface refundable amounts.

Don't accept SDLT as a fixed cost — treat it as a variable to optimise. Review every purchase for possible reliefs, especially mixed-use and multiple dwellings. A single conversation before exchange can save tens of thousands after completion.

For deeper analysis including the MDR mechanics, SDLT group relief, and partnership relief, see our guides on reducing stamp duty legally and Multiple Dwellings Relief.

Chapter 9

Can I Use My Pension to Buy Property?

Yes — but only commercial property, and only through the right pension structure. A Small Self-Administered Scheme (SSAS) or a Self-Invested Personal Pension (SIPP) can buy commercial premises directly. Growth inside the pension is free of income tax and CGT, contributions are deductible from corporation tax, and rent accumulates within a tax-privileged wrapper. For business owners whose company pays rent to a third-party landlord, redirecting that rent into a pension-owned building effectively pays rent to your own future self.

SSAS vs SIPP

A SSAS is an occupational scheme run by up to 11 members (usually directors or family members) who act as their own trustees. Its distinctive feature is the loan-back facility: up to 50% of scheme assets can be lent back to the sponsoring company at commercial interest rates — which builds funds in the pension while financing the business. A SIPP is an individual pension run by an FCA-regulated provider. Simpler to establish, but there's no loan-back, and less flexibility for group investing.

Both schemes can borrow up to 50% of net assets to part-fund a property purchase. Residential property is largely excluded; holding it triggers tax charges up to 55% of the property's value. A flat above a shop that's let to an unrelated party may pass the test if the residential element is genuinely incidental — always confirm before proceeding.

A pension-owned property is your business paying rent to your future self. Keep it commercial, compliant, and well-managed — and it becomes one of the most tax-efficient investments you'll ever make.

See our in-depth guide on protecting your trading premises through a SSAS.

Chapter 10

Advanced Company Structures for Property Entrepreneurs

A single limited company works well early on. As a portfolio scales, different activities — development, long-term letting, management, and external investment — each carry their own risk and tax profile. Mixing them in one company makes performance analysis difficult, exposes each activity to the others' liabilities, and limits tax planning flexibility.

Holding Company and Subsidiary Structures

A holding company that owns shares in separate subsidiaries allows tax-free dividend flow between UK group companies, group relief to offset losses in one subsidiary against profits in another, and ring-fencing of risk so that one struggling SPV doesn't endanger the rest of the group. The holding company can also raise finance and on-lend funds to subsidiaries at arm's-length rates.

Family Investment Companies

A Family Investment Company (FIC) lets parents retain voting control through one class of shares while children or trusts hold non-voting growth shares. Company profits are taxed at 19–25% rather than 40–45% personal rates, dividends can be distributed flexibly among family members, and shares can be gifted gradually to reduce inheritance-tax exposure. The Articles of Association and shareholder agreement need careful drafting to balance control and succession objectives.

Don't build a maze — build a map. A good structure simplifies decisions, isolates risk, and supports growth. Review your structure annually to ensure it still matches your business goals and tax position.

For a full treatment of group structures, joint ventures, and hybrid models, see our SPV and structure guide and the broader tax-efficient property ownership guide.

Chapters 11–14

Inheritance Tax, Demergers, HMOs, and Holiday Lets

Inheritance Tax Planning (Chapter 11)

IHT takes up to 40% of an estate above the available thresholds. For 2025/26, the nil-rate band is £325,000 per person, the residence nil-rate band adds £175,000 where a main home passes to direct descendants, and married couples can combine allowances — bringing the threshold to £1 million in the right circumstances. Estates above £2 million see the RNRB taper at £1 for every £2 of excess value.

Lifetime gifting is the most powerful tool: gifts that survive seven years fall outside the estate entirely, with taper relief reducing the charge if death occurs between years three and seven. Gifts from surplus income made regularly without reducing your standard of living are immediately exempt. Transferring shares in a property company rather than physical property can avoid SDLT and allow the gift to be staged across multiple tax years within annual exemptions.

Business Property Relief (BPR) can exempt up to 100% of business assets from IHT where the property activity is genuinely trading — active development, construction, or furnished holiday letting rather than passive rent collection. HMRC scrutinises these claims carefully, so documentation of time, activity, and management is essential.

The best inheritance plan starts while you're still building wealth. Structure your ownership and gifts today so that your family inherits the value of your work — not the burden of its tax.

See our guide on inheritance tax planning for property owners and IHT and trust planning.

Splitting Portfolios Between Partners (Chapter 12)

When business partnerships diverge, property portfolios need to be divided without triggering large tax bills. A corporate demerger — whether a statutory demerger, liquidation demerger, or share reconstruction — can achieve this if the right reliefs apply. Section 139 TCGA 1992 allows gains to be deferred on qualifying reconstructions where shareholders maintain proportionate interests. SDLT group relief (Schedule 7 FA 2003) allows transfers between companies under common control to be exempt from SDLT, provided the group relationship is maintained for at least three years after the transfer.

Advance clearance from HMRC under s.138 TCGA 1992 and s.701 ITA 2007 is strongly recommended before any demerger proceeds. It provides certainty and avoids the risk of HMRC later characterising the arrangement as tax avoidance.

Serviced Accommodation and HMOs (Chapter 13)

Serviced accommodation income is classed as trading income — which means full mortgage-interest deductibility, capital allowances on furniture and equipment, potential eligibility for Business Asset Disposal Relief (10% CGT rate) on sale, and the ability to make pension contributions based on trading profits. The flip side: potential National Insurance liability and business rates rather than council tax. Once turnover exceeds £90,000, VAT registration becomes mandatory and 20% VAT applies to income — though input VAT on cleaning, utilities, and maintenance becomes reclaimable.

HMOs sit within the standard property-income rules: individual landlords face the 20% interest-relief restriction, and capital allowance claims are limited to replacement of domestic items. Operating through a company restores full interest deductibility and reduces the effective tax rate. HMOs with five or more occupants require mandatory licensing; additional licensing schemes operated by local authorities may apply to smaller HMOs too. See our HMO licensing guide for Reading for a local example of the requirements.

Furnished Holiday Lets (Chapter 14)

To qualify as an FHL, a property must be available to let for at least 210 days a year, actually let for at least 105 days, and no single letting can exceed 31 consecutive days (longer occupancies cannot total more than 155 days in a year). Meeting these conditions grants access to a range of advantages not available to standard buy-to-let landlords: full deduction of mortgage interest, capital allowances on furniture and equipment, Business Asset Disposal Relief at 10% on sale, profits counting as relevant earnings for pension purposes, and flexible income splitting between spouses by election.

FHL income is standard-rated for VAT once turnover exceeds £90,000. Most FHL properties are also assessed for business rates rather than council tax — small properties may qualify for Small Business Rates Relief if the rateable value is under £15,000. Local authorities in popular holiday areas are increasingly introducing planning restrictions on short-term letting; check these before purchasing or converting.

Think like a hotelier, not a landlord. Track bookings, maintain evidence of commercial letting, and reinvest profits wisely. When run properly, an FHL turns tax efficiency into a genuine business advantage.

For full qualification criteria and tax planning, see our furnished holiday let tax benefits guide.

Quick-Answer FAQ

Answers to the questions Felix's clients ask most often.

Should I put my buy-to-let in a limited company?

It depends on your tax rate and how you plan to use the profits. If you're a higher-rate taxpayer who reinvests most of the income, a company typically wins on tax — full interest deductibility and a lower tax rate on retained profits outweigh the dividend tax cost on extraction. If you rely on rental income to live and are a basic-rate taxpayer, personal ownership may remain simpler and equally efficient. Run the numbers on your specific mortgage, income level, and extraction needs before deciding.

What is the 3% SDLT surcharge and can it be avoided?

The 3% surcharge applies when you buy an additional residential property while already owning one. It can be reclaimed if you sell your previous main residence within three years. It doesn't apply to purely commercial or non-residential property, and mixed-use properties attract a lower rate structure with no surcharge. It also doesn't apply to the flat 15% corporate rate for companies owning single dwellings above £500,000 where a qualifying business purpose is met.

How does Making Tax Digital affect me as a landlord?

If your gross property income exceeds £50,000 (based on the 2024/25 tax year), MTD ITSA is mandatory from 6 April 2026. This means keeping digital records using HMRC-approved software and filing quarterly updates rather than a single annual return. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. It's worth getting digital bookkeeping set up now regardless of your income level — the operational benefits make it worthwhile even where it isn't yet legally required.

Can I transfer properties into a company without paying CGT?

Incorporation Relief under s.162 TCGA 1992 can defer CGT when you transfer a property business to a company in exchange for shares. The gain is rolled into your share base cost rather than taxed immediately. The key condition is that your letting activity constitutes a business — HMRC requires evidence of scale, time commitment, and active management. Casual ownership of one or two properties typically doesn't qualify.

Does VAT apply to residential lettings?

Standard residential lettings are exempt from VAT — no VAT charged on rent, but also no VAT recovery on maintenance, repairs, or management costs. Serviced accommodation and furnished holiday lets are treated differently: they're classed as short-term commercial supplies and are standard-rated at 20% once turnover exceeds the £90,000 registration threshold. New-build residential construction is zero-rated, which allows full input-VAT recovery on construction costs.

What is a Furnished Holiday Let and what tax benefits does it get?

An FHL must be available for at least 210 days a year, actually let for 105 days, and individual lettings must not exceed 31 consecutive days. When these conditions are met, the property is treated as a business rather than passive investment: full interest deductibility, capital allowances on furniture and fittings, Business Asset Disposal Relief at 10% on disposal, and profits counting as pensionable earnings. It's one of the most tax-advantaged property strategies for individual landlords.

How can I reduce inheritance tax on my property portfolio?

The main tools are lifetime gifting (assets survive seven years out of the estate), holding property through a company so shares can be gifted gradually within annual exemptions, Business Property Relief (where the activity qualifies as a trade), trusts for long-term asset protection, and life insurance held in trust to cover residual liability. The nil-rate band is £325,000 and the residence nil-rate band adds £175,000 where a main home passes to direct descendants. Married couples can combine allowances. Start planning early — most of the best strategies take time to execute properly.

Can my company's pension buy my business premises?

Yes — through a SSAS or SIPP, a pension can purchase commercial property including your trading premises. The company then pays rent into the pension at market rate, which accumulates tax-free. Growth inside the pension is exempt from CGT, contributions are corporation-tax deductible, and a SSAS can also loan up to 50% of its assets back to the sponsoring company. Residential property is excluded and attracts punitive HMRC charges if held in a pension.

What is Multiple Dwellings Relief and how does it save SDLT?

MDR allows SDLT on a multi-unit purchase to be calculated on the average price per dwelling rather than the total consideration, subject to a 1% minimum rate. If you buy two flats for £500,000, MDR means SDLT is assessed on two units at £250,000 each — which can produce substantial savings compared with calculating SDLT on the full £500,000. It applies to single transactions involving more than one dwelling, including converted properties and some annexes that qualify as separate dwellings.

Your Next Steps

Every year you spend in the wrong structure, or missing legitimate reliefs, is money that compounds in the wrong direction. The issues that seem most complex — incorporation, SDLT reliefs, MTD readiness, estate planning — are exactly the things that benefit most from early professional input.

Felix & Co Accountants Ltd  ·  felixaccountants.com  ·  07877 284111  ·  felix@felixaccountants.com

Disclaimer: This guide is for general information only and does not constitute accounting, tax, legal, financial, or investment advice. Tax legislation changes frequently. Do not rely solely on this content when making financial or tax-related decisions. Felix Fualefac and Felix & Co Accountants Ltd accept no liability for any loss or damage arising from use of this information. Always seek professional advice tailored to your individual circumstances.

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