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When a profitable trading company starts to accumulate surplus cash, investing in property can appear attractive. However, buying investment property directly within the trading company is not usually advisable

Nick Wright explains why business owners should be cautious about holding investment property in a trading company and explores more suitable structures for investing excess profits, balancing tax efficiency, asset protection and long-term succession planning.

Individuals can begin receiving rental income for a variety of reasons. For example, they might decide to become a ‘buy-to-let’ property investor; or they may become an ‘involuntary landlord’ where a deceased relative leaves an investment property in their will. 

Mark McLaughlin warns that taxpayers are responsible for notifying rental income to HMRC in a timely manner to avoid the risk of penalties for failure to notify chargeability to tax.

Following the pandemic, flexible working arrangements have become a permanent feature of the UK business landscape. Many businesses now operate hybrid models, while self-employment and consultancy roles continue to grow. Although employees currently have only a legal right to request flexible working after 26 weeks of employment (with no statutory right to work from home), home working is already the norm for many. 
As a result, increasing numbers of taxpayers are investing in dedicated home office space. Where existing space is not suitable for a room to be set aside as an office, many may look to build an extension, convert a loft or build a garden room. While such arrangements may be practical, they can raise complex tax issues.

Jennifer Adams considers the tax implications of working from home in a purpose-built office.

Business rates in England and Wales are charged on most non-domestic premises, including offices, shops, warehouses, factories, restaurants, pubs, hotels, guest house and holiday lets. The amount that a business pays depends on the rateable value of its property and the business rate multiplier. Business rates are charged differently in Scotland and Northern Ireland.

Properties are revalued every three years for business rates purposes, and a new valuation comes into effect on 1 April 2026. The rateable value is based on what it would cost to rent the property at the valuation date. 
New multipliers are also introduced from 1 April 2026.

Sarah Bradford looks at the impact of the 2026 revaluation and loss of reliefs on business rates from April 2026.

Property partnerships seem popular these days – typically, as a stepping-stone to greater things. Regular readers will know that I have long criticised HMRC’s published position on whether a property partnership exists, as distinct from simply co-owned property. My argument is that HMRC has drawn up its guidance to set an unreasonably high threshold to ‘make the grade’ as a partnership.

Lee Sharpe looks at whether a joint property letting activity amounts to a partnership, and why it is relevant to landlords.  

Most people do not expect to have to pay capital gains tax (CGT) when they sell their home. Private residence relief (also known as main residence relief or principal private residence relief) normally applies in full when the property has been the taxpayer’s only or main residence throughout the whole period for which they have owned it.  

Sarah Bradford outlines the concept of a ‘main’ residence for capital gains tax purposes. 

The government (HMRC) has become increasingly worried about the volume of small and medium-sized enterprise research and development (R&D) tax credit payments where a company claims to have undertaken eligible R&D activity (and it is important to keep in mind that only certain types of R&D may qualify – there are a lot of criteria).

Lee Sharpe looks at tax aspects of modernising property and the risk of disallowance as improvements that constitute capital expenditure, losing income tax relief in the property business. 

Whether to buy commercial or residential property depends on various factors, not least the more beneficial tax system for commercial lets and whether an individual or a company is purchasing the property. The government wishes to encourage commercial lets and therefore permits a more generous tax regime than residential lettings. 

Jennifer Adams considers some important tax benefits of investing in commercial property.