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14/7/25 8:13 pm
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2025 is shaping up to be a turning point for landlords. Alongside a challenging tax environment, the Renters’ Rights Bill (RRB) is expected to introduce major changes to tenancy law in England. Together, these developments could affect how landlords manage income, sell properties, and plan for the future.
Tax pressures continue
Landlords are still dealing with the effects of recent tax reforms:
• Capital Gains Tax (CGT): The CGT allowance is now just £3,000. Selling investment property could result in higher tax bills, particularly if rates rise in future budgets
• Mortgage interest relief: Individual landlords still receive only a 20% tax credit, while limited companies can deduct the full cost as a business expense
• Inheritance Tax (IHT): Property held outside of trading businesses doesn’t qualify for business relief, leaving many landlords exposed to 40% IHT above the nil-rate bands
• Making Tax Digital (MTD): From April 2026, landlords with over £50,000 in rental income must keep digital records and submit quarterly reports to HMRC
What does the RRB mean for your tax strategy?
The RRB isn’t a tax reform, but it will affect how landlords manage tenancies, and that can influence tax planning. By replacing fixed-term contracts with rolling agreements and removing ‘no-fault’ evictions (Section 21), landlords will have less control over when they can regain possession.
This reduced flexibility could make it harder to time property sales to manage CGT liabilities, potentially pushing gains into less favourable tax years. Limits on rent increases and capped advance rent may also affect income patterns, complicating income smoothing strategies for personal tax planning.
For landlords planning succession or estate transfers, the Bill could delay sales or transfers, impacting IHT planning and reducing options to prepare properties ahead of gifting or passing on.
Finally, increased regulation and oversight may bring greater scrutiny of landlords’ tax affairs, especially during property sales or company incorporations making proactive compliance essential.
Partner at Xeinadin Barry Soraff says: “The regulatory and tax regime applied to landlords has become increasingly complex and harsh both in terms of the costs, the amount of compliance and the penalties for failure to comply. In that environment getting good advice becomes more important than ever.”
Planning ahead
Landlords should act now to prepare:
• Review ownership structure: A limited company may offer tax benefits, but transferring properties can trigger CGT and Stamp Duty
• Plan for succession: Explore ways to reduce IHT, such as gifting or restructuring, especially for landlords passing on portfolios
• Upgrade systems: Digital record-keeping will soon be mandatory under MTD. Get organised early
• Stay informed: The RRB may still evolve. Understanding your future legal obligations is just as important as knowing your tax position
Landlords will need to be both financially and legally agile. With tax rules tightening and tenancy reform underway, smart planning and early action will be key to protecting income, staying compliant, and maintaining long-term investment value.
Register now and join Barry Soraff and Paul Shamplina, founder of Landlord Action for an exclusive tax webinar hosted by LandlordZONE.
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