UK Rental Income Tax Calculator (Section 24, 2026/27).

Rental profit is added to your other income and taxed at your marginal rate. Take a landlord earning £45,000 who collects £12,000 rent, spends £2,000 on allowable costs and pays £3,000 mortgage interest. The taxable profit is £10,000, because interest is not deductible. That profit straddles the higher-rate threshold, giving £2,946 of Income Tax before a £600 Section 24 credit, so the bill is £2,346 and the after-tax cash profit is £4,654.

Yes. If you are a Scottish taxpayer, rental profit is taxed at the Scottish Income Tax rates and bands, because it is non-savings income — choose Scotland in the calculator. The Section 24 mortgage interest credit is still given at 20% for Scottish taxpayers, so a landlord paying the 42% Scottish higher rate loses relief on 22 points of every pound of interest.

The furnished holiday lettings regime was abolished from 6 April 2025 (1 April 2025 for companies). Holiday lets are now taxed like any other rental property: mortgage interest only gets the 20% Section 24 credit, capital allowances are no longer available on new spending, and the profit no longer counts as earnings for pension contributions. Use this calculator for a holiday let in the same way as a long-term let.

UK rental profit stays taxable in the UK when you live abroad. Under the Non-Resident Landlord Scheme, your letting agent — or your tenant, if rent is over £100 a week and there is no agent — deducts basic-rate tax from the rent unless HMRC has approved you to receive it gross. Either way, you file a UK Self Assessment return, where the tax deducted is credited against your bill.

Yes. From 6 April 2027, property income in England, Wales and Northern Ireland will be taxed at its own rates: 22% basic, 42% higher and 47% additional — two points above the rates on wages. Section 24 finance-cost relief will be given at the new 22% property basic rate, and the personal allowance will be set against other income first. Scotland and Wales are being given the power to set their own property income rates. This calculator uses the 2026/27 rates, which still tax rental profit at the normal Income Tax rates.

From 6 April 2026, landlords and sole traders with qualifying income over £50,000 must keep digital records and send HMRC quarterly updates under Making Tax Digital for Income Tax. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Qualifying income is your gross rental income plus self-employment turnover, before expenses.

Since April 2020, mortgage interest relief has been restricted to a 20% basic-rate tax credit. Higher-rate landlords pay tax on rental profit before mortgage interest, even where the interest cost exceeds the cash profit.

Common deductible costs include letting agent fees, landlord insurance, repairs and maintenance, ground rent and service charges, and accountancy fees. Capital improvements are not deductible against rental income.

Yes if your rental profit exceeds £1,000 per year, above the property income allowance, or if the income needs to be reported because you already complete a Self Assessment for another reason.

For higher-rate taxpayers with multiple properties, a limited company can shelter profit at 19% to 25% Corporation Tax rather than 40% to 45% Income Tax. However, SDLT and Capital Gains Tax on transfer must be weighed carefully.

Gross rental income up to £1,000 per year is tax-free with no need to report it. Above that, you can deduct either actual expenses or the allowance, but not both.