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Tax Planning

Tax planning in London for business owners, landlords and high earners

Vision Consulting plans tax for London business owners, landlords with multiple properties, and high earners with income split across salary, dividends, gains and rental. In 2026/27 there were updates across all three groups: dividend tax rates rose by 2% in April, the personal allowance is frozen at £12,570 until April 2031, a £2.5m combined allowance now applies to 100% agricultural and business property relief, and most unused pension funds enter the inheritance tax estate from April 2027.
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Vision Consulting is regulated by the Institute of Chartered Accountants in England and Wales (ICAEW), and our team includes Chartered Tax Advisers across both company and personal tax.

What tax planning actually involves

  • For a company owner, planning is the mix of salary, dividend, pension and retained profit, sized against the 10.75% basic-rate and 35.75% higher-rate dividend rates that took effect on 6 April 2026 and the £60,000 pension annual allowance. The eventual exit matters too: Business Asset Disposal Relief on qualifying business sales rose to 18% Capital Gains Tax from the same date, with a £1m lifetime gains limit per individual.
  • For someone earning between £100,000 and £125,140, marginal tax is effectively 60% once the personal allowance taper is included, so the work is pulling adjusted net income back below £100,000 through pension contributions, salary sacrifice or Gift Aid.
  • For a landlord, the question is whether each property sits in the right structure (personal, partnership or corporate); residential gains on personal disposal attract Capital Gains Tax at 18% (basic rate) or 24% (higher rate).
  • For an estate, planning runs around the £325,000 nil-rate band, the £175,000 residence nil-rate band, and the new £2.5m combined allowance for 100% Agricultural and Business Property Relief from April 2026.

What we look at first

A first review covers four things. The personal tax return filed in January: what was claimed, what wasn't, and whether the figures still describe the year ahead. The company position if there is one: extraction policy, retained profit, director's loan balance, pension contributions, and whether dividend timing fell on the right side of 5 April. The property and capital position: holding structures, financing, planned disposals, the £3,000 Capital Gains Tax annual exemption for 2026/27, and any unused ISA allowance against the £20,000 limit. The estate: wills, gifts made in the last seven years, pension nominations, and how the £2.5m combined allowance for Agricultural and Business Property Relief applies to the family business.

What changes a tax plan

A tax plan changes because the facts change. The events that most often prompt a review:
  • A sale, or planned sale, of a business or shareholding, where the £1m Business Asset Disposal Relief lifetime limit, the personal Capital Gains Tax position and the post-sale estate position all interact.A new income source: a second salary, a directorship, rental income, an inheritance, a deferred bonus, a share scheme vest.
  • A property purchase or restructure. The wrapper decision (personal, partnership, corporate) is far easier before purchase than after, and the Stamp Duty Land Tax and Capital Gains Tax consequences of moving a property between wrappers are real.
  • A generational shift: children turning 18, marrying, starting a business, becoming directors, or inheriting shares. Gifting, share transfers and trust planning sit here.
  • A change in residence or domicile, or a property held overseas. The Foreign Income and Gains regime that took effect on 6 April 2025 changes how this is structured.
  • The year-end window in March, when the current year's ISA allowance, pension contribution, Capital Gains Tax annual exemption and dividend timing can still be used.

Common patterns we see

A few patterns surface repeatedly across clients. Each of these has eligibility and individual-circumstance conditions, and the right answer depends on the facts.
  • A director draws dividends in the wrong tax year. A £30,000 dividend declared on 4 April rather than 6 April brings the income into the year the director was already at higher rate, when the same dividend a week later could have fallen into a year with headroom. Dividends are best thought about in the context of the personal tax year, not the company year end.
  • A landlord buys their next property in personal name on instinct, without first modelling against a limited liability partnership or corporate purchase. Once the property is bought, the Stamp Duty Land Tax and Capital Gains Tax consequences of moving it later are real, and the decision is harder to undo than to think about up front.
  • A high earner inside the £100,000–£125,140 taper does not make the pension contribution that would pull adjusted net income back under £100,000. The effective marginal rate in that bracket is 60% once the taper is included. Pension contributions, salary sacrifice and Gift Aid are the cleanest mechanisms to lower adjusted net income.
  • A family business owner assumes Business Property Relief will cover the full value of the company. From 6 April 2026, 100% relief is restricted to a combined £2.5m allowance per individual across Agricultural and Business Property Relief, with 50% relief on the value above (producing an effective 20% inheritance tax rate on the excess). For a business worth materially more, the planning has to start years before any transfer or death.
  • A pension is treated as the long-term inheritance tax shelter. From 6 April 2027, most unused pension funds and pension death benefits enter the inheritance tax estate. Death-in-service benefits and dependants' scheme pensions from defined benefit arrangements are excluded.

Frequently asked questions

A return reports what happened. Planning sets up the next year and the years after. For a single salary and no investments, there is usually nothing material to plan. For an owner-managed business owner, a landlord with multiple properties, or anyone with income across salary, dividends, pensions and gains, there are typically decisions each year that compliance work alone does not cover.
For a sole director with no other employees (and therefore no Employment Allowance), two common salary levels are the £5,000 secondary National Insurance threshold (which avoids employer NIC) and the £6,708 Lower Earnings Limit (which preserves a qualifying year for state pension purposes). The balance is typically taken as dividends, taxed at 10.75% basic-rate or 35.75% higher-rate from 6 April 2026. Where the company employs others and claims the £10,500 Employment Allowance, salary can usually be set higher. Pension contributions to the £60,000 annual allowance are often more efficient than additional dividends, particularly above the £100,000 personal allowance taper. The right mix depends on profits, cash flow and the director's other income.
The taper removes £1 of personal allowance for every £2 of adjusted net income above £100,000, which produces an effective marginal tax rate of 60% in that bracket. The cleanest mechanisms to lower adjusted net income are pension contributions (including via salary sacrifice) and Gift Aid donations. The right answer depends on cash flow, employer scheme rules and longer-term plans. We model the figures before recommending a route.
It depends on the income profile, the financing, the holding period and the eventual exit. Personal ownership is simpler and gains on residential property are taxed at 18% or 24% Capital Gains Tax depending on rate band, with a £3,000 annual exempt amount for 2026/27. Corporate ownership protects mortgage interest as a deductible expense and can suit longer-term portfolios, but creates double taxation on extraction. Shares in a pure property investment company typically do not qualify for Business Property Relief on death, since Business Property Relief is restricted to trading businesses.
Yes. For owner-managed businesses, the company decision and the personal decision are usually the same decision in two parts: pricing a dividend, sizing a pension contribution, timing a director's loan, structuring a sale. The company accounts, corporation tax computation, payroll, personal tax return and the planning around them sit in one engagement with one point of contact.
Several things sit in the 12–24 months before a sale. Whether the share structure qualifies for Business Asset Disposal Relief (the trading test, the 5% personal company test, the two-year ownership test). How much of the £1m BADR lifetime limit per individual has already been used. The position of any EMI options that need to be exercised or held, noting that for EMI shares the two-year clock runs from grant of the option. The treatment of retained cash, investment assets and any property held inside the trading company, which can affect both BADR and post-sale Business Property Relief. The post-sale estate position, since proceeds entering the estate change the inheritance tax picture materially.
The 2026/27 ISA allowance (£20,000) and Capital Gains Tax annual exempt amount (£3,000) cannot be carried into the next year; the window in March is the last point to use them. The pension annual allowance (£60,000) works differently: unused allowance from the previous three tax years can be carried forward into the current year, subject to having been a registered pension scheme member in those years and to tax relief being capped at 100% of relevant UK earnings. For directors, dividend timing matters too: a dividend declared on 4 April falls into the current personal tax year, the same dividend on 6 April falls into the next. For high earners inside the £100,000 taper, a pension contribution made before 5 April can pull adjusted net income back below £100,000 and reinstate the personal allowance for the year.
From 6 April 2027, most unused pension funds and pension death benefits will sit inside the inheritance tax estate rather than passing outside it. Death-in-service benefits and dependants' scheme pensions from defined benefit arrangements are excluded, as are death benefits passing to a surviving spouse, civil partner or registered charity. For anyone who has been using a pension as a long-term inheritance tax shelter, the calculation changes. Whether to draw on pension funds sooner, gift other assets, or restructure beneficiary nominations is worth reviewing well before April 2027.

How to start a conversation

Contact us to book a free initial consultation. Bring last year's personal tax return, an outline of company income or property holdings, and any specific event coming up. Call 020 8554 2135 or email info@visionconsulting.co.uk.

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