Property Tax

If you are already an experienced landlord, or just thinking about letting out your first property, it is important that you seek professional tax advice.

Property tax has changed significantly in recent years, with the abolition of the wear and tear allowance and the restriction imposed on claiming mortgage interest for certain types of lettings.

There is also the added burden of now having to report certain residential property disposals online within 60 days of the completion date. These new rules apply to individuals, trusts, and estates.

How I can help

The Tax Angel can help you with all property tax issues, including:

  • Annual rental accounts
  • Let Property Campaign disclosure and settlement with HMRC
  • Identifying different types of rental businesses
  • Explaining the typesof expenditure you can claim
  • Tax treatment of revenue and capital expenditure
  • Tax obligations of renting out a property
  • 60-day CGT reporting for UK residential property
  • Tax implications of owning a second property
  • Overseas property ownership
  • Owning a property jointly
  • Inheriting a property
  • Selling or gifting land or property
  • Stamp Duty Land Tax Overpayment Claims

How did I become a landlord?

Letting property can take a number of forms, there is the professional landlord whose business it is to own and rent out a portfolio of rental property.

You may have own a house and may have moved abroad or relocated due to circumstances and may not want to sell your property as you intend to resume living in at some point in the future.

You may have an elderly relative who has gone into care and they may not want to sell their house, but you may be renting it out to generate funds to cover care home fees.

You may have children at university and buy a house for them to live in whilst away studying and let rooms to other fellow students.

You may own a holiday property, either here in the UK or abroad, which you rent out when you are not using it.

You may even rent out rooms in your own house to lodgers or for short stays via Airbnb or similar websites.

However, you have become a landlord, whether intentionally or by accident, it is essential that you take the time to find out about your property tax obligations and how to fulfil them.

What expenses can I claim against rental income?

There are numerous expenses you can claim to legitimately reduce your rental income and at the same time your property tax liability. These include, repairs & maintenance, letting agent fees, advertising costs, ground rent, service charges, utilities paid on behalf of the tenants, insurance costs to name but a few.

Can I claim tax relief on mortgage interest?

Mortgage interest is probably the biggest expense you will incur and so it is important that you understand how tax relief on mortgage interest works.

If you rent out a residential property, the tax relief on the mortgage interest is calculated as a separate tax credit based on the equivalent of the basic rate tax relief due on the mortgage interest and this is then deducted from the tax due on your rental profit. Any tax credit not used one year, because the tax on your rental income is not high enough to offset the tax credit, or you have losses is available to be carried forward to be used in a future tax year.

If you rent out a commercial property, or a property which qualifies under the furnished holiday letting (FHL) rules, you will be able to continue to claim tax relief on mortgage interest as an expense in your profit and loss account, which you were previously able to do for residential lettings before the current rules were introduced. Given the different treatment in the claim for mortgage interest, you need to be able to identify what type of letting you have.

How is income from Furnished Holiday Lettings and Airbnb treated for tax purposes?

FHL properties including Airbnb enjoy more generous tax treatment, so it is important to seek professional advice to determine if your property qualifies.

Broadly to qualify the property  has to be located in the UK or European Economic Area,  it must be commercially let and available for letting for at least 210 days in the tax year and so let for at least 155, with no one letting exceeding 31 continuous days.

In addition to preferential tax relief on mortgage interest, you can determine how profits are divided in the FHL is rented in joint names, so you maximise personal allowances and tax bands.

More beneficial capital gains tax and inheritance tax rules are also afforded to FHL properties, and I can advise you on these.

Read more: Work out your rental income when you let property – GOV.UK (

What powers do HMRC have to gather information?

It is widely known that HMRC have increasing powers to gain information about landlords who may not have declared their rental income. They can gather information directly from letting agents, lettings websites, disgruntled tenants, the local press etc. If you are advertising your property for rental, it is not just potential tenants that can find you!

HMRC are more frequently sending out, what are known as ‘nudge’ letters, these remind landlords of their tax obligation and how to fulfil them.

HMRC have also introduced the Let Property Campaign. A scheme designed to make it easier for landlords to come forward and declare any previously undeclared rental income. The advantage being that it is offers reduced penalty charges and an opportunity for landlords to bring their tax affairs up to date.

Making a voluntary declaration using the HMRC Let Property Campaign can result in significantly lower penalties than if HMRC approach write to you first, suggesting that they have information to suggest that you may be in receipt of undisclosed rental income.

The Tax Angel has successfully dealt with many disclosures using the Let Property Campaign and negotiated significantly lower penalties with HMRC. It may even be possible to agree a payment plan with HMRC.

The outcome is that your property tax affairs will be up to date and you don’t have to live with the stress of waiting to be approached by HMRC. It is well known that voluntary disclosures result in far lower penalties than prompted disclosures.

Read more: Let Property Campaign: your guide to making a disclosure – GOV.UK (

Services I offer

With over 30 years’ personal tax experience working across the North West and North East of England, in both accountancy and law firms, I am well placed to deal with all your personal tax requirements.

Income Tax

PAYE income, expenses, tax codes, overseas issues.

Self Assessment

All aspects of tax return preparation.

Property Tax

Rental accounts, HMRC disclosures, 60-Day CGT returns, SDLT.

Capital Gains Tax

Mitigation, sale of assets, overseas matters, trusts, and estates.

Inheritance Tax

Planning, gifts, exemptions, tax returns, estate registration.


Income tax and inheritance tax returns, trust registration, tax advice & planning.

Tax Planning

Income tax, CGT, IHT mitigation, all aspects of trusts, and estates.

HMRC Enquiries

Disclosures, Let Property Campaign, Tax Investigations.