Pro Tool
Calculate tax on UK rental income. Section 24 impact, personal vs limited company, allowable expenses. See your true after-tax profit. Instant, accurate.
Calculate Your SDLT — FreeRental income is added to your other income and taxed at your marginal rate — 20% (basic), 40% (higher), or 45% (additional). You can deduct allowable expenses (insurance, repairs, management fees) but mortgage interest is restricted under Section 24 for individual landlords. You get a 20% tax credit on mortgage interest instead.
Section 24 (fully phased in since April 2020) prevents individual landlords from deducting mortgage interest as an expense. Instead, you receive a basic-rate (20%) tax credit. For basic-rate taxpayers, the impact is neutral. But higher-rate taxpayers lose out significantly — and the gross rental income can push you into a higher tax band.
It depends on your tax band and portfolio size. Company ownership avoids Section 24, keeps mortgage interest fully deductible, and pays 25% corporation tax. But extracting profits via dividends incurs additional tax. Generally, higher-rate taxpayers with mortgaged portfolios benefit most from company ownership. Our tool calculates both routes.
Allowable deductions include: insurance, letting agent fees, maintenance and repairs (not improvements), ground rent, service charges, accountancy fees, legal fees for tenancy agreements, travel costs for property management, and the property income allowance (£1,000). Our tool lists every deduction to ensure you claim everything you're entitled to.
Yes — if your rental income exceeds £1,000/year (the property income allowance), you must file a Self Assessment tax return and declare it. Even if expenses exceed income (creating a loss), you should still report it as the loss can be carried forward. Registration deadlines apply — register by 5 October following the end of the tax year.