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Income Tax on UK Property

Income from UK property is subject to UK Income Tax whether the landlord is resident in the UK or abroad.

Special provisions apply in the case of the Rent a Room scheme - see the section on Rent a Room.

Subject to the above exception, letting income is charged to tax at the standard UK income tax rates and must be declared annually on your Self Assessment Tax Return.

If your Gross income from rent is £15,000 or more in a tax year you must declare it on the full Self Assessment tax return.  If it’s under £15,000 you may be able to complete a shorter four-page return.

Timing of Tax Payments

Income Tax payments on your rental income are normally made on 31 January and 31 July in two equal instalments followed by a balancing payment the following January.

For the fiscal year ended 5 April 2011, tax will be payable partly on 31 January 2011, partly on 31 July 2011 with a balance payable on 31 January 2012.

The first two 'instalments' are initially calculated as 50% of the tax due based on your profits for the previous year. However, in the first year care needs to be taken as no 'instalment' payments will have been made and therefore in the above example the whole tax liability would be due on 31 January 2012.

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