How do I pay tax on rental income as an accidental landlord?

If you do not already send a tax return, register for Self Assessment by 5 October after the tax year letting starts. For rent first received in 2026-27, register by 5 October 2027 and file online by 31 January 2028.

An accidental landlord is someone who lets out a home they used to live in, perhaps after moving in with a partner, taking a job elsewhere or failing to sell. The tax rules are the same as for any other landlord, but a few points matter more when the property was your home. This page follows GOV.UK, checked on 16 October 2026.

Do you need to tell HMRC?

If you need a return and do not usually send one, register by 5 October following the tax year you had the income. If you register late, GOV.UK says you could get a penalty. The online return is still due by 31 January, unless HMRC's notice to file is dated after 31 October. Then you get 3 months from that date. The tax is still due by 31 January.

Before you let, GOV.UK also says you must get permission from your mortgage lender if the property has a mortgage.

What you can deduct

You pay tax on the profit: rent less allowable expenses. Day-to-day running costs count, such as:

• letting agent fees and accountants' fees
• buildings and contents insurance
• repairs and maintenance, but not improvements
• ground rent, service charges, and Council Tax or bills you pay
• replacing domestic items such as a sofa or fridge, if the old one is no longer used there

The cost of buying the property and work that goes beyond repairs are capital costs, not expenses. Instead of expenses you can deduct the £1,000 property allowance, but you cannot use it if you claim the mortgage interest tax reduction.

Mortgage interest

If you own the home personally, mortgage interest is not deducted from the rent. For 2026-27 you get a tax reduction of 20% of the lower of your finance costs, your property profits, or your income above the Personal Allowance. Any amount not used is carried forward. For a higher-rate taxpayer, this means the profit is taxed at 40% but the interest only earns 20% back.

From 6 April 2027 rental profit has its own rates under Finance Act 2026: 22%, 42% and 47% in England and Northern Ireland, with the mortgage interest reduction at 22%. See the tax rate on rental income from April 2027.

A worked example (outside Scotland, 2026-27)

Sam moves in with a partner and lets their old flat from 6 April 2026 for £1,100 a month. Sam earns a salary of £35,000.

Sam's taxable income is £35,000 + £11,000 − £12,570 = £33,430, inside the £37,700 basic rate band. Scottish rates differ.

What this means for you

Sam has not sent a return before, so registers for Self Assessment by 5 October 2027, files the 2026-27 return online and pays by 31 January 2028.

Making Tax Digital (MTD) counts rent before expenses but not salary. Sam's £13,200 is under the £20,000 line that applies from 6 April 2028, based on 2026-27 income, so MTD does not apply yet. Rent over £20,000 that year would bring Sam in from April 2028. The free MTD check shows where you stand.

When you sell

Private Residence Relief covers the years you lived in the home plus the last 9 months you owned it, even if it was let then. Say Sam owned the flat for 12 years, lived there for 9, and makes an £80,000 gain. Relief covers 9.75 of 12 years, which is £65,000, leaving £15,000. After the £3,000 annual allowance, £12,000 is taxable. Using 2026-27 rates, and assuming Sam's taxable income in the year of sale is again £33,430, £4,270 falls in the basic rate band at 18% and £7,730 at 24%: £768.60 + £1,855.20 = £2,623.80.

Letting Relief does not help here: it only applies where you lived in the home at the same time as your tenants. Capital Gains Tax due on a UK home must be reported and paid within 60 days of completion.

Steps to take

1. Get your mortgage lender's permission before you let.
2. Keep a record of rent, expenses and mortgage interest from the first month.
3. Register for Self Assessment by 5 October after the tax year the letting starts.
4. File your return and pay by 31 January, claiming expenses and the mortgage interest reduction.
5. Check each year whether your rent passes the MTD line.
6. When you sell, work out the gain and report and pay within 60 days of completion if tax is due. If you are registered for Self Assessment, include the sale on your tax return as well.

For more, see how to tell HMRC you're a landlord and the landlord section.