Rental property can create Income Tax, Capital Gains Tax, property transaction tax and digital-reporting obligations. Treatment differs for companies, joint ownership, overseas property and non-resident landlords.
Rental income and records
Individuals pay tax on rental profit after allowable deductions and reliefs. The first £1,000 of qualifying property income may be covered by the property allowance, although actual expenses may produce a better result. Keep rent, agent statements, insurance, repairs, service charges and professional fees, plus purchase, improvement and sale records for future capital calculations.
Finance costs and ownership
Individual residential landlords generally receive a basic-rate tax reduction for qualifying finance costs rather than deducting them like ordinary expenses. Companies follow Corporation Tax rules. Ownership structure should be reviewed before purchase; incorporation does not automatically save tax.
Buying and selling
Stamp Duty Land Tax applies in England and Northern Ireland, with different taxes in Scotland and Wales. Higher rates can apply to additional dwellings and non-residents. When property is sold, Capital Gains Tax may involve costs, improvements, ownership shares, losses and reliefs. Tax due on a UK residential-property disposal generally must be reported and paid within 60 days of completion.
Current changes
The former furnished-holiday-letting regime ended from April 2025. For 2026/27, the individual CGT annual exempt amount is £3,000 and general rates are 18% and 24%. Gross property and sole-trade income are combined for MTD Income Tax thresholds, starting above £50,000 from April 2026.
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