The property tax blog.
Tight, focused pieces that drill into the practical mechanics of the topics introduced on our in-depth guides. Each article maps to a parent pillar, so you can read a single piece or follow the full cluster.
MTD ITSA 2026
1 of 5Section 162 Relief 2026
6 of 7No Longer Automatic
Section 162 incorporation relief was never optional, but landlords long treated it as automatic. From April 2026 HMRC expects the property business test to be evidenced up front, so a passive buy-to-let portfolio can no longer assume the CGT deferral will hold.
Substance Over Investment
From April 2026 the Section 162 claim turns on whether a landlord can show genuine business substance rather than passive investment. The right documentation, gathered before the transfer, is what holds the CGT deferral together.
Failed Claim CGT Risk
When the Section 162 business test is not met, the deferred gain crystallises on transfer and becomes payable like any disposal. The CGT charge is immediate, the 60-day clock starts at completion, and the SDLT bill lands on top.
SDLT Traps on Transfer
Section 162 relief does nothing for Stamp Duty Land Tax. The transfer of a property portfolio into a limited company is taxed at market value, almost always with the 5 percent additional-dwelling surcharge on top, and the Schedule 15 partnership route is the only common way to relieve it.
Existing Mortgages
Personal buy-to-let mortgages rarely move with the property when a portfolio is incorporated. Each loan is redeemed and refinanced onto a commercial buy-to-let product in the company name, and the redemption penalties, new lender fees, stress tests, and deposit gap can rival the SDLT cost.
Electing Out of S162
Section 162 defers the capital gain on incorporating a property business, but deferral is not always the best outcome. Where the gain is small, losses or the annual exempt amount are available, or a higher base cost is worth more than the deferral, electing out can be the cheaper long-term answer.
SDLT Strategies
2 of 75% Additional-Dwelling Surcharge
The additional-dwelling surcharge adds 5% to every SDLT band when a purchase leaves you owning more than one home. Since the October 2024 Budget lifted it from 3% to 5%, it is the single largest planning number a Harrow property investor faces on the day of completion, and a handful of conditions and reliefs decide whether it bites at all.
Mixed-Use SDLT
A property with both residential and non-residential parts is taxed at non-residential SDLT rates, which start at £150,000 and avoid the residential surcharge. The saving can be large, which is exactly why HMRC challenges thin mixed-use claims.
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