Paying corporation tax on rental property increase in value each year?

Tax Planning and Financial

I've just received my company's (only activity is residential property lettings) annual accounts and 2023 corporation tax return from my accountant for review and signature.

During the year, I had a RICS valuation which showed an increase inthe property value since my last valuation 6 years ago of roughly £30k. I gave this to my accountant as I thought it would only be used to update the balance sheet.

I am amazed/furious to see that the £30k has been added  to taxable income (it equates to approx. 2 full years of net rental income) so that it has been treated in the same way as if it were additional rental income, costing me roughly £6k in additional tax (although in my case, reducing losses carried forward by £30k). I thought it was a mistake and rung around a few fellow landlords who spoke with their accountants. Nobody in my small circle is aware of this kind of treatment and all believe the increase in value should not have effected my corporation tax liability.

My accountant is away until after Christmas and this was prepared by one of his staff. I had assumed it was a mistake until I saw the below on the accountingweb website:

"The Financial Reporting Council (FRC) have removed the undue cost or effort exemptions that were in FRS 102 (September 2015) as part of the triennial review amendments, including those which were in Section 16. Therefore, all properties which meet the definition of investment property under FRS 102 (March 2018) are accounted for under Section 16 and must be remeasured to fair value at each balance sheet date with fair value gains and losses going through profit and loss."

Has anybody come across this? If it is correct, is there anyway out of it by electing to file in a certain way etc? If not, this effectively means that anyone holding residential rental property in a company will be paying corporation tax on the uplift in property value every year - that can't be, surely. This would be a bigger issue than S.21 and all the other anti-landlord proposals we have been hit with in recent years!