Landlord Taxes – FAQs Q1. What taxes do UK landlords have to pay on rental income? Landlords pay Income Tax on rental profits at their personal marginal rate (20%, 40%, or 45%). Limited company landlords pay corporation tax instead. Capital Gains Tax applies on disposal of investment property at 18% or 24% depending on income level. Stamp Duty Land Tax applies on purchase, with a higher rate surcharge on additional dwellings. Inheritance Tax can also apply on death. Atlas Tax Advisors helps Milton Keynes landlords manage all of these efficiently and lawfully. Q2. What expenses can I claim against my rental income? Allowable expenses include letting agent fees, property repairs and maintenance (but not improvements), council tax and utility bills paid by the landlord, ground rent and service charges, insurance, accountancy fees, advertising for tenants, mileage to inspect properties, and replacement of domestic items in furnished lets. Mortgage interest is no longer fully deductible for individual landlords; instead, a 20% basic-rate tax credit applies. Limited company landlords still receive full mortgage interest relief as a normal trading expense. Q3. Should I hold buy-to-let properties personally or through a limited company? It depends on your tax bracket, mortgage profile, long-term plans, and how you intend to use the rental income. Limited company structures are often more tax-efficient for higher-rate taxpayers building portfolios for growth, because mortgage interest remains fully deductible and corporation tax can be lower than personal income tax. However, incorporation costs, tighter mortgage availability, and Stamp Duty on transferring existing properties must be weighed up carefully. We model both routes with real numbers before recommending a structure. Q4. How does Making Tax Digital affect landlords from April 2026? From 6 April 2026, sole-trader landlords with combined gross self-employment and property income above £50,000 must keep digital records and submit quarterly updates to HMRC under MTD for Income Tax. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. Even smaller landlords benefit from preparing early. Atlas Tax Advisors helps Milton Keynes landlords select MTD-compliant software, set up digital records, and handle quarterly submissions without disruption to their existing workflow. Q5. What is the Stamp Duty surcharge on additional dwellings? Buyers of additional residential properties (such as buy-to-lets and second homes) pay an SDLT surcharge of 5% on top of standard rates, following the increase from 3% effective 31 October 2024. The surcharge applies to most purchases above £40,000 by individuals who already own residential property, and to all corporate purchases. Reliefs and refunds apply in some circumstances, such as replacing a main residence. We help landlords plan acquisitions carefully to avoid unnecessary surcharge exposure where reliefs are available. Q6. Do I need to declare rental income if I make a loss? Yes, you must still declare rental income on your Self Assessment return even if expenses exceed income for the year. Losses cannot be offset against other income (such as employment), but they can be carried forward indefinitely against future rental profits from the same UK property business. Failing to declare can lead to HMRC penalties. Atlas Tax Advisors registers landlords for Self Assessment, files annual returns, and tracks property losses carefully so they offset future profits efficiently. Q7. How is Capital Gains Tax calculated when I sell a rental property? You calculate the gain by deducting the original purchase price, acquisition costs, capital improvements, and disposal costs from the sale proceeds. The annual exempt amount of £3,000 is subtracted, and the remaining gain is taxed at 18% (basic rate) or 24% (higher and additional rate). You must report and pay the tax through a UK Property Disposal return within 60 days of completion. We handle the full calculation, reliefs, and 60-day filing as a single fixed-fee service. Q8. Can I use Private Residence Relief if I lived in a property before letting it out? Yes, if a property has been your only or main residence at some point, you receive Private Residence Relief for the period it was your home plus the final nine months of ownership. Lettings Relief may also be available where a portion was occupied alongside a tenant under specific conditions. The rules tightened in April 2020, so older guidance is unreliable. We calculate PRR carefully for every relevant disposal and ensure all available relief is claimed correctly. Q9. What records do I need to keep as a landlord? You should keep tenancy agreements, rental income records, all expense invoices and receipts, mortgage statements, agent statements, capital improvement records, energy performance certificates, gas safety certificates, and any correspondence with HMRC. Records must be kept for at least five years after the 31 January submission deadline of the relevant tax year. Cloud-based property accounting tools such as Hammock and landlord-friendly Xero make this straightforward and ensure you are MTD-ready well before April 2026. Q10. Can Atlas Tax Advisors help with overseas property income? Yes. UK residents are taxed on worldwide rental income, including overseas property, but credit may be available for foreign tax already paid. Reporting requirements involve specific Self Assessment supplementary pages and careful currency conversion using HMRC-recognised rates. Non-UK property income often has unique reliefs and pitfalls depending on the country involved, so professional advice matters. We help Milton Keynes landlords with property in the EU, USA, the Middle East, and other jurisdictions, ensuring full HMRC compliance.