Income tax is charged on your rental and other income from property, including income from your furnished lettings. Expenditure you have incurred in generating that income, including interest on money you have borrowed to buy the let property, is allowed as a deduction. The rents and deductions from all your properties in the UK are combined to arrive at your net profit or loss.
Capital allowances are allowed as an expense, but you cannot claim capital allowances on furniture and equipment in residential property. You can carry forward any losses against your future letting profits. Any losses on some short-term lettings, eg holiday lets, can be set against your other income. If the gross income from letting part of your own home is no more than £4,250 a year (£2,125 for jointly owned homes), it is exempt from tax.
Income from your overseas property is taxed separately.Last Updated
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04: Property income
The FSA does not regulate tax advice. Tax rules are subject to change.
