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UK Budget Announcement: Expert Insights from Leonard Curtis
The UK Budget always brings change, but this year’s announcements have introduced some particularly significant shifts for property owners and businesses.
At Leonard Curtis, we pride ourselves on helping clients navigate these changes with clarity and confidence. Our Funding and Legal teams have shared their expert views on these key changes affecting landlords and employee ownership trusts (EOT).
Impact on Landlords
With income tax rates on property income set to rise, Becky Owen, Head of Funding at Leonard Curtis, said:
“The decision to increase the rates of income tax from property income is of course unwelcome to landlords – coupled with the Renters Rights Bill and the associated increase in compliance and other costs, landlords have shouldered extensive changes during the last 12 months. However, challenge always brings opportunity and whilst some may choose to exit the sector, we know there remains a resilience in the market in terms of good operators delivering a vital service to millions of tenants. We look forward to continuing to support landlords to navigate their funding requirements as they look to ready their portfolios for the future.”
Changes to Employee Ownership Trusts (EOTs)
The Budget also introduced reforms to EOTs, focusing on governance and tax treatment. Jennifer Moore, Director at Leonard Curtis Legal, commented:
“The Budget marks a turning point for EOTs, drawing a clear line between purpose and tax advantage. In a dual shift of stronger governance (trustee independence and UK residency alongside arms length valuations) and partial re taxation (CGT relief halved) the Government has made it clear that employee ownership must now be a genuine transfer of power, not merely a tax efficient release of wealth.
By introducing real tax exposure on exit the Budget has diluted one of the key incentives for business owners but simultaneously recalibrated EOTs towards a more balanced, sustainable employee ownership model. The strategic question now for boards and advisers is whether under this new, more rigorous regime EOTs still deliver the best overall succession value and only those prepared to cede real control in well structured, genuinely employee led businesses will likely find it truly rewarding.”
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