Investors spent a decade moving property into companies to escape Section 24. Then the company route got more expensive too. On 1 April 2023 the main rate of corporation tax rose from 19% to 25%, and the rules on ‘associated companies’ were tightened so that portfolios split across many SPVs share one set of thresholds. The structures most affected are exactly the ones GalimAI maps - and our data shows the connected groups behind them. This study reads the change from that proprietary view.
What GalimAI’s own data reveals
The corporation-tax change bites hardest on connected groups of companies - and connection is precisely what GalimAI’s data captures. Across the 463,022 property-owning companies and more than 1,000,000 owners it maps, each company is linked to its named directors and, through them, to the other companies those people control. That turns an abstract ‘associated companies’ rule into a visible web: the portfolio landlord running fifteen SPVs, the family group spread across a dozen entities, the developer with a holding company and project vehicles.
That is the unique lens. Public records tax each company in isolation; GalimAI sees the group, its financing and its strain signals together. Our own analyses surface the cohort most exposed when margins tighten - the most heavily-leveraged companies, the family-owned groups using multiple vehicles, and the accelerating dissolutions our data tracked through 2025 as marginal SPVs were wound up.
For an investor or counterparty that is the edge: the geared company portfolios whose post-tax margin no longer covers their financing - and the owners likely to consolidate or sell - are a reachable list of named groups in GalimAI, not a line in a tax table.
What changed: 25%, and the associated-company trap
From 1 April 2023 the main corporation-tax rate rose to 25% for profits over £250,000, with a 19% small-profits rate up to £50,000 and marginal relief between. Non-UK-resident companies holding UK property pay 25% with no small-profits rate or marginal relief.
The bigger change for property was structural: the ‘associated companies’ definition was broadened so that companies controlled by the same people share the £50,000 and £250,000 thresholds between them. A landlord with ten SPVs no longer gets ten small-profits bands - the thresholds are divided, pushing each vehicle toward the higher rate.
The public backdrop
| Profit per company | Effective position after April 2023 |
|---|---|
| Up to £50,000 (and few associates) | 19% small-profits rate |
| £50,000 – £250,000 | Marginal relief - rate tapers up |
| Over £250,000, or many associated SPVs, or non-resident | Full 25% |
The headline rate is public; what is not public is which owners run enough connected SPVs to lose the lower bands. That is what GalimAI’s ownership-group mapping shows.
The most plausible mechanism
Higher corporation tax plus divided thresholds cut the post-tax margin on company-held portfolios just as interest rates raised their financing costs. Geared SPV groups feel both at once, which is why distress and dissolution concentrate in exactly that cohort. We frame this as a strong correlation with a clear mechanism, not single-cause proof - rates and weak capital growth press on the same companies.
Sources
The proprietary figures in this study (the 463,022 companies, 1,000,000+ owners and the distress signals) are GalimAI first-party data. The public background figures are drawn from:
- ICAEW - corporation tax rate to increase to 25% from 1 April 2023
- UK Property Accountants - corporation tax changes from April 2023 (associated companies)
Frequently asked questions
What does GalimAI's own data add here?
It sees the ownership group, not just the company. GalimAI maps 463,022 property companies and 1M+ owners, linking each company to its directors and the other companies they control - so the 'associated companies' that lose the lower tax bands are visible, with financing and distress signals attached.
What changed in April 2023?
The main corporation-tax rate rose from 19% to 25% for profits over 250,000 pounds, with marginal relief down to 50,000. Associated-company rules were broadened so connected SPVs share the thresholds, and non-resident property companies pay the full 25%.
Why does it hit property companies hard?
Many landlords hold property across multiple SPVs. Dividing the thresholds across associated companies pushes each toward 25%, cutting post-tax margin just as financing costs rose - a strong correlation with a clear mechanism, not single-cause proof.
How can investors use this?
The geared company groups whose margins no longer cover financing - likely to consolidate or sell - are a reachable list of named owners in GalimAI.