UK Buy To Let (BTL) Income Tax On Property Rental Calculator For Landlords

Our free buy to let Rental income tax calculator

Please note that the online tax calculators may not look right on a mobile device. You are recommended to view the tax calculators on a desktop/laptop.

We have created a UK Property rental income tax calculator to help you understand how much property tax you will pay to HMRC. This is useful for any landlords that have buy to let property investments.

We have built the rental tax calculator based on you being:

– A basic rate taxpayer is earning less than £50,270. Basic rate taxpayers pay 20% income tax on property profits.

– A high rate taxpayer earning more than £50,270 but less than £150,000. High-rate taxpayers pay 40% income tax on property profits.

– An additional rate taxpayer is earning more than £150,000. Additional rate taxpayers pay 45% income tax on property profits.

Section 24 mortgage interest relief cap means landlords cannot offset all mortgage interest costs against their rental income. HMRC now add back mortgage interest and finance costs, and you pay tax based on your relevant bandings.

HMRC have provided landlords with tax relief on mortgage interest at 20%. If landlords paid mortgage interest costs of £800, you would get a tax relief of £160 (£800 X 20%). This is irrespective if you are a basic rate taxpayer, a high rate taxpayer or an additional rate taxpayer.

Landlords do not need to worry about how to perform these property tax calculations because our buy-to-let rental tax calculator does the hard work for you.

Should you buy a residential buy to let property investment in your name or a limited company?

One of the reasons why landlords use a property company is to save tax. The corporation tax of 19% is less than the basic rate tax band of 20%, much less than the 40% income tax band for high-rate taxpayers.

From April 2023, the corporation tax rules change. Any property investment company that makes more than £50,000 in property profits will be put on a sliding scale corporation tax rate from 19% to 25%.

Any property limited company that makes more than £250,000 will be subject to 25% corporation tax from April 2023.

Greater interest charges using a mortgage in a limited company

Our mortgage brokers often tell us that it costs landlords a greater mortgage interest rate to use a property investment company than the mortgage interest rate in the landlord’s name.

However, we have also heard that mortgage interest rates in Furnished Holiday Lets (FHL) and House of Multiple Occupation (HMO) are similar rates of mortgage interest irrespective if the landlord’s purchases a buy-to-let in their name or a limited company.

When using the property rental tax calculator, you should understand the mortgage interest rates if you buy in your name or a limited company.

The buy-to-let income tax calculator will do all the hard work for you. It will calculate the mortgage finance interest costs to derive your taxable property profits based on the mortgage entered.

Paying income tax on extracting cash out of a limited company

There are many ways to take money out of a property investment company. It would help if you were mindful as a landlord that owns a property investment company that you pay two lots of tax

– Corporation Tax on the property profits made

– Income tax on any wages/dividends/interest that you extract from the property investment limited company

You do not need to worry about the calculations, as we have done the hard work for you with our rental income tax calculator.

Additional costs of running a property investment company

Landlords need to consider the costs of running a property investment company. Running a property investment company is not always cheap as you have to pay for additional items

– Increased bookkeeping requirements

– Filing of annual accounts to Companies House

– Filing of annual corporation tax returns to HMRC using the CT600 form

File ATED reports to HMRC each year

Use our free landlord rental income tax calculator

You are free to use our landlord tax calculator to see how much you will pay if owned in your name or a limited company. Using our rental income calculator, you can decide whether to purchase a buy-to-let property in a limited company or under your name.

For the most part, we see that landlords who are basic rate taxpayers keep investing in property in their name. There are very few differences for owning property in their name against owning property inside a limited company.

Please note that the online property income tax calculators may not look right on a mobile device. You are recommended to view the calculators on a desktop/laptop

 Investing in a UK Buy-To-Let (BTL) property can be a lucrative venture, but landlords should be aware that it comes with tax obligations. Rental income generated from a UK BTL property is subject to taxation, and landlords can efficiently calculate their tax liability using our user-friendly calculator. Stay informed about the tax implications to make the most of your investment in UK property.

What is a Buy-To-Let (BTL) property in the UK, and how does it generate rental income?

Buy-To-Let (BTL) property in the UK is one purchased with the intention of renting it out. Rental income is generated when tenants pay regular rent to the property owner, providing a source of income for the landlord.

Are there tax implications for UK landlords with Buy-To-Let properties, and how can these be calculated?

Yes, UK landlords with Buy-To-Let properties are subject to taxation on their rental income. To calculate the tax charge, landlords can use our dedicated calculator, which helps determine the amount owed based on various factors such as rental income and allowable expenses.

What expenses can landlords deduct when calculating tax on a Buy-To-Let property in the UK?

Landlords in the UK can deduct allowable expenses, such as mortgage interest, property maintenance costs, and letting agent fees, when calculating tax on a Buy-To-Let property. These deductions can help reduce the overall taxable rental income.

Are there any exemptions or relief options available for landlords with Buy-To-Let properties in the UK?

Landlords may be eligible for certain exemptions and reliefs, such as the Private Residence Relief, but it depends on the specific circumstances. Seeking professional advice can help landlords navigate available options to minimize their tax liabilities.

How can landlords stay informed about changes in tax regulations related to UK Buy-To-Let properties?

Landlords can stay informed about changes in tax regulations by regularly checking official government updates and consulting with tax professionals. Keeping abreast of any amendments ensures that landlords can adapt their strategies and make informed decisions regarding their Buy-To-Let investments.

Free Online Tax Calculators

We continue to develop brand new U.S and UK tax calculators for you to use. We focus on tax calculators such as Income Tax, Capital Gains Tax, Stamp Duty Land Tax, and Inheritance/Estate Tax. Use our online tax calculators today to help you make money-saving decisions tomorrow.


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