The complete guide to tax returns for landlords

Jun 17, 2021

This free downloadable guide is for people who own and let out one or more flats or houses outside of their main residence and so have to file a tax return.

It covers everything you need to know and answers all the most commonly asked questions including…

  • What makes residential landlords different?
  • Do I need to file a tax return?
  • Can I file my own tax return?
  • How do I register for self-assessment?
  • Deadlines and penalties
  • Capital gains tax
  • Coming clean about rental income
  • What expenses can I claim as a landlord?

We’ve includes a taster from the guide below. If you’d like to find out more, simply enter your details and away you go.

A sample from the guide

Capital gains tax

Capital gains tax (CGT) is a tax on the profit you make when you dispose of an asset, such as a flat or house, and might need to be reflected on your tax return if the amount breaches the CGT-free annual allowance.

Higher and additional-rate taxpayers face a 28% CGT on disposal of residential property other than their main residence. For basic-rate taxpayers, the rate will generally be 18%.

If you decide to sell a rental property, perhaps because you’re intending to move up the ladder, and you make a taxable gain, you’ll need to:

  • report any CGT liability to HMRC within 60 days (30 days prior to 27th October 2021) of completion of the sale.
  • pay any CGT owed within 60 days (30 days prior to 27th October 2021) of completion of the sale.

If you wouldn’t otherwise be completing a self-assessment tax return – if you have no income other than through PAYE – then that’s the job done.

If you still need to file a tax return, however, you’ll also need to include in your return details of the sale of the property and any CGT already paid.

From April 2020, the 60 day (30 day if completion is before 27th October 2021) reporting applies to both UK-resident and non-UK-resident landlords disposing of UK rental property. Non UK residents have to report within 60/30 days whether there is tax to pay or not but UK residents do not have to report if there is no tax to pay.

Coming clean about rental income

Over the years, we’ve worked with many clients who didn’t realise they needed to declare rental income and are now worried sick about it.

That might be because they’re new to completing self-assessment tax returns. Maybe they were a bit naive and didn’t think a bit of ‘pocket money’ needed to be declared. Or perhaps they thought somebody else, such as the letting agent, had it in hand.

The good news is, there’s a mechanism for declaring unpaid rental income which makes it much less scary. The Let Property Campaign was launched in 2013 and is effectively an amnesty programme. Own up and you could get penalties reduced or cancelled, and agree a payment plan for any tax you owe.

What you shouldn’t do is put it off disclosure until you submit your tax return – it needs to be dealt with immediately, ideally with our support in those conversations with HMRC.

And if you’ve just started earning rental income, make sure you do complete a tax return and declare it in full.