{"id":22838,"date":"2026-09-08T11:48:35","date_gmt":"2026-09-08T10:48:35","guid":{"rendered":"https:\/\/yatirim.uk\/tr\/ingilterede-kira-geliri-vergisi\/"},"modified":"2026-09-20T10:47:28","modified_gmt":"2026-09-20T09:47:28","slug":"ingilterede-kira-geliri-vergisi","status":"publish","type":"page","link":"https:\/\/yatirim.uk\/en\/ingilterede-kira-geliri-vergisi\/","title":{"rendered":"How much tax do you pay on rental income in the UK?"},"content":{"rendered":"
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How much tax do you pay on rental income in the UK?<\/h1>\n

A Turkish citizen resident in Turkey pays no tax on the first \u00a312,570 of UK rental income, and 20% on the part between \u00a312,571 and \u00a350,270.<\/strong> Thanks to that allowance, the income tax on a single mortgage free flat earning \u00a315,000 a year is zero in most cases. Had the same owner been resident in the United Arab Emirates there would be no allowance, and the same profit would carry \u00a32,258 of tax. Below are three scenarios worked line by line, the filing calendar and penalties, the Making Tax Digital exemption and the 60 day rule that applies when you sell.<\/p>\n\n

A worked example: a flat earning \u00a315,000 a year<\/h2>\n

Tax is charged on the profit left after expenses, not on the gross rent. The expense lines below are kept close to the actual management and service charge figures of the Manchester and Liverpool flats in our portfolio.<\/p>\n

Item<\/th>Amount<\/th><\/tr><\/thead>
Management fee (10% of gross rent)<\/td>\u00a31.500<\/td><\/tr>
Service charge<\/td>\u00a31.200<\/td><\/tr>
Landlord insurance<\/td>\u00a3250<\/td><\/tr>
Accountancy and filing<\/td>\u00a3360<\/td><\/tr>
Repairs and maintenance<\/td>\u00a3400<\/td><\/tr>
Total expenses<\/strong><\/td>\u00a33.710<\/strong><\/td><\/tr>
Taxable profit<\/strong><\/td>\u00a311.290<\/strong><\/td><\/tr>
Personal Allowance<\/td>\u00a312.570<\/td><\/tr>
Income tax payable<\/strong><\/td>\u00a30<\/strong><\/td><\/tr><\/tbody><\/table><\/div>\n

No tax arises because the profit stays below the Personal Allowance. The return is still filed: the allowance is not applied automatically, it is claimed on form SA109.<\/p>\n\n

The same flat when the owner is resident in Dubai<\/h2>\n

Entitlement to the Personal Allowance is decided by nationality and residence together, not by nationality alone. Turkey is on the United Kingdom\u2019s list; the United Arab Emirates, Qatar, Saudi Arabia and Kuwait are not.<\/p>\n

Buyer<\/th>Personal Allowance<\/th>Tax on the flat above<\/th><\/tr><\/thead>
Turkish citizen resident in Turkey<\/strong><\/td>Yes<\/td>\u00a30<\/td><\/tr>
Turkish citizen resident in Dubai<\/strong><\/td>None<\/td>\u00a32.258<\/td><\/tr>
British or EEA citizen<\/strong><\/td>Yes (residence does not matter)<\/td>\u00a30<\/td><\/tr><\/tbody><\/table><\/div>\n

For a buyer living in the Gulf this single line can reverse the comparison between personal ownership and a limited company. Source: HMRC guidance RFIG30570<\/a>.<\/p>\n\n

How the calculation changes with a mortgage<\/h2>\n

Mortgage interest is not deducted as an expense; it is given as a 20% reduction against the tax calculated. The reduction is worked out on the lowest of three figures, the finance costs, the property profit and the income above the allowance, and it cannot create a refund.<\/p>\n

Item<\/th>Amount<\/th><\/tr><\/thead>
Gross rent (two flats)<\/td>\u00a330.000<\/td><\/tr>
Expenses (excluding interest)<\/td>\u00a37.400<\/td><\/tr>
Taxable profit<\/strong><\/td>\u00a322.600<\/strong><\/td><\/tr>
Taxable amount after the Personal Allowance<\/td>\u00a310.030<\/td><\/tr>
Income tax at 20%<\/td>\u00a32.006<\/td><\/tr>
20% reduction for mortgage interest (\u00a39,000)<\/td>(\u00a31.800)<\/td><\/tr>
Income tax payable<\/strong><\/td>\u00a3206<\/strong><\/td><\/tr><\/tbody><\/table><\/div>\n

For your own figure, the Rental income tax calculator<\/a> where you can enter your own scenario and see the result line by line. Expected rents and yields city by city are on our cities with the highest rental yields<\/a> page.<\/p>\n\n

Rates<\/h2>\n

Rental income is taxed on top of your other UK income. From 6 April 2027 rental income will be taxed at its own rates, two points above the ones for salary; the table below sets the two periods side by side.<\/p>\n

Taxable income band<\/th>2026\/27<\/th>2027\/28 onwards<\/th><\/tr><\/thead>
The first \u00a312,570<\/strong> (personal allowance)<\/td>0%<\/td>0%<\/td><\/tr>
\u00a312,571 to \u00a350,270<\/td>20%<\/td>22%<\/td><\/tr>
\u00a350,271 to \u00a3125,140<\/td>40%<\/td>42%<\/td><\/tr>
Above \u00a3125,140<\/td>45%<\/td>47%<\/td><\/tr>
the mortgage interest tax reduction<\/td>20%<\/td>22%<\/td><\/tr><\/tbody><\/table><\/div>\n

From 2027 allowances and reliefs will be applied first to other income such as salary and only then to property income. For an investor with no other UK income nothing changes; for anyone with both salary and rent the taxable amount grows.<\/p>\n\n

Which expenses are deductible and which are not<\/h2>\n

An expense must be incurred wholly and exclusively for the letting business. The main items HMRC accepts and those it does not:<\/p>\n

Deductible<\/th>Not deductible<\/th><\/tr><\/thead>
Management and letting agent fees<\/td>The capital part of the mortgage payment<\/td><\/tr>
Repairs, maintenance and general upkeep<\/td>Improvements to the property (capital expenditure)<\/td><\/tr>
Landlord insurance<\/td>Mortgage interest (not an expense, a 20% tax reduction)<\/td><\/tr>
Ground rent and service charge<\/td>Personal expenses<\/td><\/tr>
Accountant\u2019s fee<\/td>Stamp duty paid on the purchase<\/td><\/tr>
Legal fees for lets of a year or less<\/td>Costs of your own use while the flat is empty<\/td><\/tr>
Advertising for tenants and communication costs<\/td><\/td><\/tr><\/tbody><\/table><\/div>\n

If gross rental income is below \u00a31,000 a year you can use the property allowance instead of claiming expenses, and you may not need to file at all. If your expenses exceed \u00a31,000, claiming expenses is better.<\/p>\n\n

Non-resident landlord registration (NRL)<\/h2>\n

If you live outside the United Kingdom for six months of the year or more, HMRC treats you as a non-resident landlord. Without registering, your letting agent must withhold 20% when paying the rent; if you have no agent and your tenant pays more than \u00a3100 a week, the tenant withholds it. Once registered, the rent is paid gross and you settle the tax once a year through your return. The difference in cash flow is large.<\/p>\n