Rental income tax calculator
Is it better to hold a UK home in your own name or through an SPV limited company? Enter your rental income, your costs and your mortgage interest, and see the tax and the money you keep under both routes side by side.
For the subject in full and the questions we are asked most, see our guide page:
How Much Tax Do You Pay on Rental Income in the UK?
Note: the calculation uses the rates for England, Wales and Northern Ireland. Scotland applies different income tax bands. This page is general information and is not a substitute for tax advice.
Personal ownership or an SPV?
The result updates as you change the figures. Select 2027/28 on the tax year tab to see the effect of the new rental income rates.
Personal ownership
SPV limited company
Rental income, corporation tax and dividend rates
Rental income is taxed on top of your other income. From 6 April 2027 it will be charged at separate rates, two points higher than the rates on salary.
| Taxable income band | 2026/27 | 2027/28 onwards |
|---|---|---|
| First £12,570 (personal allowance) | 0% | 0% |
| £12,571 to £50,270 | 20% | 22% |
| £50,271 to £125,140 | 40% | 42% |
| Above £125,140 | 45% | 47% |
| Mortgage interest tax relief | 20% | 22% |
| Item | Rate |
|---|---|
| Corporation tax, profits up to £50,000 | 19% |
| Corporation tax, profit between £50,000 and £250,000 | Marginal relief, 26.5% effective |
| Corporation tax, profits above £250,000 | 25% |
| Dividend allowance | £500 a year |
| Dividend tax, basic rate | 10.75% |
| Dividend tax, higher rate | 35.75% |
| Dividend tax, additional rate | 39.35% |
| Item | Amount |
|---|---|
| Personal ownership: Self Assessment return | £300 + VAT = £360 a year |
| SPV: accountancy and annual accounts | £300 + VAT = £360 a year |
| Confirmation statement (Companies House) | £34 a year |
| Company incorporation (one-off) | £50 |
The calculator applies the £360 accountancy fee to both scenarios and deducts it from taxable profit. The Companies House fees are shown for information because the amounts are small. SPV mortgage rates are usually 0.5 to 1 point higher than personal buy-to-let rates, so remember to reflect that in the interest field.
Six things that decide it
Tax is not the only factor. Mortgage terms, when you take the profit out and the cost of transferring later all belong on the same table.
Personal ownership and Section 24
Since 2020 mortgage interest cannot be deducted from rental income. Instead you get a tax reduction worth 20% of the interest. For a higher-rate landlord this raises the true cost of borrowing sharply: the accounts can show a profit while the cash flow turns negative.
SPV limited company
In a company set up to let property, the whole of the mortgage interest is deductible and the remaining profit is charged to corporation tax at between 19% and 25%. As long as the profit stays in the company no second layer of tax arises, which is a cash advantage for an investor building a portfolio.
The cost of taking the profit out
Moving company profit to yourself brings corporation tax first and then dividend tax. The first £500 is exempt; above that the rate is 10.75% at the basic rate, 35.75% at the higher rate and 39.35% at the additional rate. If you pay out the whole profit every year, most of the SPV advantage disappears.
Non-resident landlord
You fall under the Non-resident Landlord Scheme. Without HMRC approval on form NRL1 your tenant or managing agent must deduct 20% from the rent at source. Once approval is granted the rent is received gross and the tax is paid through the annual return. The personal allowance is not automatic: Turkish nationals can claim it only if they are also resident in Turkey. A Turkish national living in the Gulf has no entitlement and the rental profit is taxed from the first pound.
Joint ownership and a share for your spouse
For married couples, jointly owned rental income is treated as 50/50 by default. If the real shares differ, Form 17 is used to declare them. Giving the lower-rate spouse a larger share can cut the tax bill without setting up a company at all.
Transferring from your own name to a company
Moving an existing home into an SPV counts as a sale: the company pays SDLT, including the additional property surcharge, and capital gains tax can arise in your own name. The mortgage has to be restructured as well. That is why deciding the structure before the first purchase is far cheaper than correcting it later.
Filing and payment timetable
The tax year runs from 6 April to 5 April. Non-resident landlords have one extra application step.
Registration
You must notify HMRC and register for Self Assessment by 5 October following the tax year in which the rental income arose.
NRL application
If you are non-resident, obtain gross payment approval on form NRL1. Until approval arrives your agent must deduct 20% from the rent.
Record keeping and MTD
From 6 April 2026, landlords with gross income above £50,000 file quarterly under Making Tax Digital. The threshold falls to £30,000 in 2027 and £20,000 in 2028.
Filing and payment
The tax year closes on 5 April. The deadline for filing online and paying is 31 January. If the tax exceeds £1,000, payments on account are due on 31 January and 31 July.
Company timetable
In an SPV, corporation tax is paid 9 months and 1 day after the end of the accounting period and the CT600 return is filed within 12 months. The annual accounts also go to Companies House.
Common questions about rental income tax
Service charge, ground rent, buildings and landlord insurance, managing agent fees, maintenance and repairs, accountancy fees, letting costs and travel are all deductible. Spending that improves the property, such as adding a room, is capital rather than an expense and enters the capital gains calculation on sale.
No. Only the interest element counts. Under personal ownership the interest is not even an expense; it gives relief at 20%, rising to 22% from 2027. In an SPV the whole of the interest is deducted.
No. If you have no other UK income and are entitled to the personal allowance, no income tax arises on rental profit up to £12,570 a year. The obligation to file still stands.
It depends. British and EEA nationals are entitled in all cases. To qualify through a treaty you must be both a national and a resident of that country. Turkey is on HMRC's list, so a Turkish national living in Turkey gets the £12,570 allowance. The United Arab Emirates, Qatar, Saudi Arabia and Kuwait are not on the list: a Turkish national living in Dubai has no entitlement. The claim is made on form SA109 with your tax return.
No. An SPV has fixed annual costs and its mortgage rates are usually higher. On a small, unmortgaged portfolio personal ownership is often ahead. The gap turns in the SPV's favour where the mortgage interest is high and the owner sits in a higher tax band.
Yes. Corporation tax is paid, but dividend tax arises only when you move the money to yourself. An investor who reinvests the profit in further purchases defers that layer for years.
If you are fully liable to tax in Turkey your worldwide income is reportable there. Tax paid in the UK is credited against the Turkish liability under the double taxation treaty. The exact outcome depends on your circumstances, so review it with advisers in both countries.
Capital gains tax, inheritance tax, ATED, capital allowances on furnished lettings, joint ownership shares and the Scottish bands are all outside its scope. The tool assumes a single property with a single owner.
Get the structure right before you buy
The choice between personal ownership and an SPV is made at the first purchase. Transferring later triggers stamp duty and capital gains tax. We look at your portfolio, your income level and your exit plan together and prepare a written comparison.
Last updated 31 August 2026. The rental income tax rates have been verified against official sources.
capital.works® is a registered trade mark of YATIRIM UK LIMITED. The information on this page is general in nature and is not tax or legal advice. Rates and thresholds can change; consult a qualified tax adviser before you decide.