The income generated from land or property in the UK is treated as arising from a UK property business. The underlying legislation defines this broadly to include all activities that produce rental income or similar receipts from UK land, whether the taxpayer is subject to Income Tax or Corporation Tax.

Although property income is treated as coming from a business, landlords are not generally regarded as trading unless they meet the normal trading tests. As a result, most trading-related tax reliefs, such as certain Capital Gains Tax reliefs, do not usually apply. Property business profits are instead calculated using principles similar to those for trading profits.

Since the 2017–18 tax year, the cash basis is the default method for calculating profits and losses for most individual landlords. However, companies and some other landlords must still use Generally Accepted Accounting Practice (GAAP).

A wide range of persons can carry on a UK property business, including individuals, partnerships, trustees, companies and non-residents with UK property income. Using an agent does not change who is treated as carrying on the business.

In most cases, all UK property income is treated as part of one single property business, allowing income and expenses across different properties to be combined. UK and overseas property, however, are treated as separate businesses. Activities carried out in different legal capacities, such as personally, as a partner or as a trustee, are also treated as separate property businesses for tax purposes.

Source:HM Revenue & Customs | 02-02-2026
Categories: Business

by Admin

Share

STAY IN THE LOOP

Subscribe to our free newsletter.

Related Posts

View all
  • Alternative providers of higher and further education may be able to claim refunds of VAT following a recent Court of Appeal ruling, although the position remains subject to further legal

    Continue reading
  • Cryptoassets can create unexpected tax liabilities. HMRC’s guidance highlights several areas where mistake can be made.

    Assuming crypto-to-crypto exchanges are tax-free. Exchanging one type of

    Continue reading
  • HMRC has revealed that it had £42.8 billion in outstanding tax debt at the end of March 2025, equivalent to 5% of total tax receipts. The figures appear in its corporate report, The HMRC tax debt

    Continue reading
  • You may have to pay Income Tax on your pension if your total annual taxable income exceeds your Personal Allowance. This applies whether you receive the State Pension, a workplace pension or a

    Continue reading