With the self-assessment deadline approaching, HMRC urges landlords with unpaid tax on property income to disclose earnings from buy-to-let properties.
The Let Property Campaign allows individual landlords to report previously undisclosed tax on rental income for UK and overseas residential properties.
This campaign covers landlords with single or multiple rental properties, those renting out rooms in their main home beyond the Rent a Room Scheme threshold, and owners of holiday lets. Landlords living abroad or planning to stay away for over six months must also declare UK property income, typically subject to UK taxes.
After deducting expenses and allowances, profit on rental income is taxable, with the rate depending on individual circumstances, such as the landlord’s Income Tax band. However, this campaign excludes non-residential properties, such as shops or garages, and property income tied to companies or trusts.
Common oversights in tax declarations include renting out a former home after moving in with a partner, inheriting a property, renting out a home post-divorce or using rental income to cover care home fees. Even renting to family members (such as university students) must be disclosed, and Capital Gains Tax applies to the sale of any non-primary residence.
By clarifying these common errors, HMRC encourages landlords to ensure full compliance and avoid penalties on undeclared rental earnings.
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If you think the above may apply to you and would like to discuss your circumstances, please get in touch.
