Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property118. Read the original article for full details.

HMRC Issues New Claim Rules for Landlord Incorporation Relief

HMRC has published new guidance outlining the requirements for landlords claiming Section 162 Incorporation Relief on property business transfers completed from 6 April 2026. The relief is no longer automatic, and landlords must now submit a formal claim with specific information as set out by HMRC.

The changes follow amendments made by the Finance Act 2026 to Section 162 of the Taxation of Chargeable Gains Act 1992. For transfers after 6 April 2026, landlords must make a positive claim for Incorporation Relief, providing details required by HMRC. The new guidance, published at CG65735, specifies what information must be included and the deadlines for submission.

Key Requirements for Claims

HMRC expects most Section 162 claims to be made with the Self Assessment return for the tax year in which the business was transferred. The claim must identify which disposals of chargeable assets are covered and the total amount of Incorporation Relief being claimed. Additional information is required, including:

• A description of the business activities being transferred
• The status of the transferor (individual, trustee, partnership, or LLP)
• Details of the company receiving the business
• The number and type of shares issued in exchange for the business, and the date of issue
• A calculation of the relief, including the value of chargeable business assets at the date of transfer, the value of non-chargeable assets, any consideration received other than shares, and the amount of gain being deferred

HMRC has clarified that a valuation of the company shares issued is not required for the Section 162 calculation. However, valuations of the properties and other chargeable business assets being transferred remain essential to establish the gains before Incorporation Relief is applied.

New Statutory Deadline

The Finance Act 2026 introduces a specific deadline for making a Section 162 claim. Claims must be made by the first anniversary of the 31 January following the tax year in which the business transfer took place. For example, a business transferred on 19 July 2026 (in the 2026/27 tax year) must have a claim submitted by 31 January 2029.

60-Day Property Return Still Applies

HMRC confirms that the requirement to report certain disposals of UK residential property within 60 days via the CGT on UK Property Account remains unchanged. Where Incorporation Relief is only partially available and some Capital Gains Tax is payable, the amount of relief claimed should be entered in the property return.

These changes are particularly relevant for letting agents and inventory clerks supporting landlords with property business incorporations and related compliance.