Tax on Rental Properties: Expert Landlord Accountants Who Help You Keep More
Landlord in the UK? From income tax on rental profits to capital gains tax when you sell, the rules are complex — and the stakes are high. Digivolve Accountants helps individual landlords and property companies minimise tax, stay compliant with HMRC and grow portfolios with confidence.
Book a free landlord tax review Email hi@digivolve.co.uk Call 01444 300 981
Common landlord tax challenges
1) Income tax on rental profits
You’re taxed on profits — rental income minus allowable expenses such as repairs, agent fees, insurance and accountancy. Get the categories right and you legally reduce tax; get them wrong and you could overpay or invite HMRC questions.
2) Mortgage interest (Section 24)
For personally owned residential lets, finance costs are restricted and replaced with a 20% tax credit. The impact can be significant at higher rates of tax. We model your real after-tax returns and advise on strategies to improve them.
3) Capital Gains Tax (CGT) when you sell
Disposals can trigger CGT. Timing, use of allowances, matching rules, property history and ownership split can make thousands of pounds of difference. We plan exits ahead of time to reduce liabilities where possible.
4) Inheritance Tax (IHT) on property portfolios
Property is often a family’s biggest asset — and biggest IHT exposure. We advise on gifts, trusts, company structures, and will-based planning so more of your wealth passes to your beneficiaries.
5) Digital record-keeping & Making Tax Digital (MTD)
Quarterly reporting and digital records are the direction of travel. We set you up with simple cloud bookkeeping (Xero, bank feeds, digital receipt capture) so compliance becomes painless.
How Digivolve helps landlords
- Landlord tax returns — accurate returns with all reliefs and allowances claimed.
- CGT planning & calculations — pre-sale planning, disposal calculations and HMRC reporting.
- Property incorporation advice — assess whether moving to a company structure makes sense, including step plans and tax implications.
- IHT planning for property — wills, ownership structures and trusts guidance (with trusted legal partners).
- Cloud accounting for landlords — Xero setup, landlord-friendly charts of accounts, rules and reporting packs.
- HMRC compliance & deadlines — no missed dates, no penalties, no stress.
Allowable expenses landlords often miss
- Letting & management fees
- Repairs & maintenance (not capital improvements)
- Safety checks & certificates (EPC, gas, electrical)
- Landlord insurance (buildings/contents/RGI)
- Accountancy & professional fees
- Advertising & tenant referencing
- Direct costs of running the tenancy (postage, calls)
- Replacement of domestic items (RDI) rules
- Pro-rata home office/admin costs (where applicable)
- Finance costs relief via 20% credit (personal ownership)
We’ll review your last 12–24 months to identify missed claims and help you put simple systems in place so nothing is overlooked again.
Own property personally or via a limited company?
There’s no one-size-fits-all answer. A company can offer potential benefits — such as different tax rates and full deduction of mortgage interest for residential lets — but it also introduces costs, admin and potential taxes on extraction. We analyse:
- Portfolio size, gearing and growth plans
- Your marginal tax rate now vs future
- Exit strategy (sell properties vs hold for income)
- IHT planning and family involvement
- Costs of incorporation (including potential SDLT/CGT considerations)
We’ll model both routes with real numbers so you can decide with confidence.
Case study: £8,000 tax saved for a Sussex landlord
A client with four rentals was overpaying due to unclaimed expenses and faced a large CGT bill on a planned sale. We re-categorised expenses correctly, implemented better record-keeping and timed the disposal to maximise allowances. Result: £8,000 tax saved and a clear plan for future acquisitions.
What you get with Digivolve
- Specialist landlord knowledge — we understand property tax inside out.
- Digital-first service — streamlined, transparent and fast.
- Proactive planning — not just filing, but forward-looking advice.
- Local team in Haywards Heath — serving landlords across Sussex and the UK.
- Personal service — While we love technology, we value client relationships and lok to build long term trust with clients.
“We don’t just file your tax return — we help you make better decisions that improve your after-tax returns.”
Landlord tax FAQs
Do landlords pay tax on all rental income?
No — you’re taxed on profits after allowable expenses. Good bookkeeping ensures nothing is missed.
Can I offset my mortgage interest?
For personally owned residential lets, mortgage interest is restricted, and you receive a 20% tax credit instead. In a company, finance costs are generally deductible.
Should I put my rental properties into a limited company?
It depends on your portfolio, tax band, lending and goals. We’ll model both scenarios so you can see the numbers clearly before deciding.
What records do I need to keep for HMRC?
Rental statements, invoices/receipts, finance statements, insurance, safety certificates and any improvement vs repair evidence. We set you up with cloud tools so this is simple.
What is Replacement of Domestic Items (RDI)?
Relief for like-for-like replacement of furnishings/appliances in residential lets (not initial fit-out, and rules apply).
Get your free landlord tax review
Let’s check you’re claiming everything you should and make a plan to keep more of your rental income.
Prefer email? hi@digivolve.co.uk | Call 01444 300 981