Renting property out: what you keep, and what you can claim
The claim list most landlords miss, and the honest answer on owning through a company.
Property4 min readAnyone with one rental, a room, a holiday let or a small portfolio.
The short answer
- Rent is income. You are taxed on the profit, not the rent.
- Every allowable cost lowers the bill, and most landlords claim too few of them.
- A company only starts to win once you keep the profit in rather than spend it.
Taxed on
Profit
Rent minus allowable costs
UK mortgage interest
20% credit
Not a full deduction since 2020
UK room in your home
£7,500 free
Rent a Room scheme
- Owned personally£5,600
40% on £14,000 profit
- Owned in a company£3,500
25% corporation tax, money left in
Do it in this order
- 1Open one account for the rent and pay every property cost out of it. Your records write themselves.
- 2List the costs monthly, not in a panic each year.
- 3Check the small reliefs: renting a room, letting jointly, or a holiday let with its own rules.
- 4Put the tax aside as the rent arrives, not at filing time.
- 5Once profit is more than you need to live on, ask an accountant about a company. Not before.
Only if you want the detail
The claim list
Deduct these from the rent before tax.
When a company is worth it
It is not the automatic win people online claim.
What people get told, and what is true
I only declare rent if I make a profit.
You usually still have to report it, and a loss carried forward can save tax later.
A new kitchen is a repair.
A like for like replacement is a repair. An upgrade is an improvement, and it counts on sale instead.
Now do it on your numbers
Reading is the easy half. The saving comes from applying this to your income, your country and this tax year, with the deadline written down.
Where this comes from
General guidance, not personal advice. Anything involving a company, a trust or another country should be checked by a qualified accountant or tax adviser before you act.
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