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Property income tax guides

Home » Property income tax guides

How to Work Out Your Rental Profit for Tax (Step-by-Step)

One of the most important things to understand as a landlord is that HMRC does not tax you on the rent you receive; it taxes you on your rental profit. That is the amount left after you have deducted your allowable expenses from your rental income.

Automatic exchange of information

HMRC are actively trying to deter and tackle tax non-compliance, such as tax evasion, in a few different ways. One such way is through Automatic Exchange of Information (AEoI) agreements.

Restriction of tax relief on mortgage interest – section 24

Mortgage interest on residential properties (apart from furnished holiday lettings) paid by individuals are restricted to 20% Income Tax Relief.

Pension schemes

UK residents can pay personal pension contributions up to their UK earnings or their Pension Annual Allowance whichever is the lower.

Declaration of Trust

Will a transfer of beneficial interest in a property using a declaration of trust save tax?

Selling off or developing part of your home

You have made enquiries and believe you can sell off part of it for property development. How should you go about this to avoid paying a large amount of tax.

Business Asset Disposal Relief

Business Asset Disposal Relief is available if you dispose of a trading asset.

Furnished holiday lettings

Profit from properties that meet the qualifying tests for furnished holiday lettings are taxed following the rental business calculation rules.

Types of property ownership in the UK

Sole ownership, Joint ownership, Common ownership

Who should own the property?

Let’s discuss the advantages and disadvantages of who owns a property.

Are you a property investor or developer?

As programmes like Property Ladder show, many people are keen to invest in property.

Rent a room scheme

If you let out a furnished room in your home, provided it is not an office, Rent a Room relief can be claimed.

No rental income but still incurring bills

The rental income after deducting allowable expenses is added to your income for income tax purposes before savings income and dividend income.

Property rental business

Most landlords will be running a property rental business.

Self assessment – how it works

How does self assessment work – let us explain by way of an example.

Allowable costs against rental income

It’s one of the most common questions we get asked and it’s understandable why.

How much tax will I pay on my rental income?

There are complicated calculations behind rental income.

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UK Landlord Tax

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