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Capital expenditure in property businesses cannot be deducted from rental profits. It includes costs like buying land, building structures, and improving properties. However, certain capital allowances, such as for plant and machinery, or relief for replacing domestic items, may offer tax relief over time.

The Non-Resident Landlord Scheme ensures that UK rental income from landlords living abroad is taxed correctly. Tax is deducted at source by the letting agent or tenant, unless HMRC approves a gross rent payment. Compliance with the scheme is critical to avoid penalties and interest.

Corporation tax property losses must first be set against a company’s total profits for the same accounting period. Unused losses can be carried forward, requiring a formal claim within two years. Special rules apply for pre-2020 Income Tax Property Losses

HMRC allows two main ways to relieve property losses: Carry-forward relief for future property profits and relief against general income for capital allowances or agricultural expenses. Specific rules apply for each type of loss, and claims must be made within strict deadlines.

Rental income from property outside the UK is taxable in the UK only if you're a UK resident. From April 2025, all UK residents will be taxed on the arising basis for worldwide income, including foreign rental profits.

The cash basis simplifies tax for landlords by taxing rental income when received and expenses when paid. It’s the default method for those with income below £150,000 but comes with specific rules for finance costs, late payments, and prepayments. Learn when the cash basis applies, its restrictions, and how to make the right choice for your rental business.