Real estate is one of the most lucrative investments in the world. You can live on your property as long as you want or rent it out to make some profit. You can rent your property to commercial enterprises as well. The option is gaining much popularity these days. Offices and enterprises don’t delay rent and maintain the property well.

As a landlord, you must pay property tax and rental income tax on your property each year. Property tax is paid by every resident and non-resident who invests in British properties. As a resident landlord, you are liable to pay your rental income tax to the UK government. Other taxes are levied on you if you use your real estate for commercial purposes.

Landlords don’t usually handle the tax filings for their real estate. Property managers do. Get some property tax advice from tax advisors in the UK.

What Comes Under Rental Income?

As a landlord, you only have to pay income tax on the profit you make from renting your property. Most landlords need to know that the profit on a rental property is the money you save after paying rental home expenses like heating, sewerage and domestic maintenance. You can even deduct expenses on seeking legal help and on mortgage interests.

This way, we’ll have three types of landlords:

  • The ones who don’t make a profit on rental property
  • The ones who pay rental income taxes at a rate of 20%
  • The ones who pay rental income taxes at a rate of 40%

Selling Your Property in the UK

Selling real estate in the UK would also levy an amount of tax. If you’re selling a property that has not been your real home and whose price has increased over the years, you will have to pay capital gains tax. A capital gains tax is what you pay on the profit that you make by selling a service, product or real estate that has increased in market value. For property deals, the CGT (capital gains tax) is 18% for standard taxpayers.

Tax consultants in the UK help calculate the annual tax on selling properties. The property tax scene legislature is ever-evolving. A tax advisor will help you with the latest ratio of payable tax on your personal assets.

a business record

Declare Your Rent Income

Many landlords live away from their rental real estate. Property managers and rent collectors manage the estates. Even if you don’t directly receive payments, you should be able to show where all the money goes in your tax returns. Withholding any information about the rental income can be counted as a deliberate attempt at tax evasion.

Seek Help from Property Tax Specialists in London

To stay informed about rental income disclosures and the HMRC rental income policy, get in touch with IBISS & Co. The service comprises chartered tax advisors that offer free initial tax review and unlimited phone support to their customers. Our services include VAT, payroll services and capital gains taxes. To learn more, call 01922 218 999.

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