Portfolio landlords are being urged to review their ownership structures ahead of tax changes due to take effect in April 2027.

Accountancy firm Price Bailey says higher-rate taxpayers are likely to face increased income tax bills on rental profits, even after changes to finance cost relief.

The planned tax increases will raise the basic rate from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47%. Finance cost relief will also rise from 20% to 22%, but this is expected to only partly offset the impact for landlords with mortgage borrowing.

Jon Chambers, tax director at Price Bailey, commented: “We’re seeing portfolio landlords question more than ever whether individual ownership still makes sense. The 2% rise, due to come in next year, adds even more financial burden onto existing tax restrictions and regulatory costs coming this year, with many investors reaching tipping point. Whilst the 2% increase in basic rate and higher rate dividend tax applies a year earlier [from April 2026], director shareholders have more flexibility around profit extraction.”

According to Price Bailey, this, combined with the April 2026 Business Property Relief cap, which affects succession planning, has pushed many landlords to conduct strategic reviews to determine which properties justify continued ownership. According to Price Bailey, reviewing restructuring opportunities now puts portfolio landlords in a stronger position to navigate the next 12 months.

Chambers added: “Landlords can navigate this successfully but waiting until April 2027 means missing restructuring opportunities. Early action is the best step landlords can make, to strengthen their position going into the next financial year.”