Any individual who receives income from letting a property has to declare this to the HM Revenue & Customs, even if they do not make a profit. Losses from UK rental properties can be carried forward to set against future profits from your UK properties. But if you are running a trade such as hotel, guesthouse or a B&B, you’re treated as being self-employed.
How you are taxed on the rent you receive from your single or portfolio of properties depends on the type of letting. If you have several properties, all rental receipts and expenses can be lumped together, so expenses on one property can be deducted from receipts on another. However, overseas properties are treated separately to UK properties, so you can’t lump together your UK holiday let and your French property.
Even if you are letting out part of your own home, you may have a tax to pay. Though, you may be able to claim rent-a-room relief. If you don't already receive a tax return, you must notify HMRC of any rental income by 5 October after the end of the tax year (5 April). If you own rental property jointly with a partner, you will both be responsible for reporting the income to HM Revenue & Customs.
For a free consultation, just give us a call and we can discuss your rental income further.