Investors who operate their portfolios through limited companies are set to face higher taxes when they eventually come to sell, after the chancellor unveiled changes to the way capital gains tax is calculated.

At the moment, individuals who own more than one home pay 28% in capital gains taxes on the total amount of the rise in the property’s price when it’s sold, but companies can deduct the amount of that price rise which has been caused by inflation, resulting in a lower tax bill.

This way of offsetting the effects of inflation – known as ‘indexation allowance’ – is due to be frozen in January 2018, in a move expected to make the exchequer £1.8bn over the next five years.

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Following the Budget announcement, mortgage experts have quickly reassured landlords that the effect of these latest changes may be fairly limited in view of the fact that the overall rate of corporation tax is going to fall to 17% by 2020.

In addition, the freeze won’t be applied retrospectively, meaning landlords will still be able to apply the indexation allowance to inflation increases between the day the property was bought and 1^st January.

In recent years, more and more landlords and investors have moved their portfolios into limited company structures to mitigate the changes to mortgage tax relief, which began in April and will be phased in until 2020, and a 3% stamp duty increase on second homes.

The government insists these latest tax changes are designed to create a level playing field for owner-occupiers when it comes to purchasing the available housing stock in the UK, as 300,000 homes are built every year over the next decade.