Yes. Rental income from UK property is taxable as income, regardless of whether you are a full-time landlord or rent out a single room. You must declare rental income on your Self Assessment tax return. Allowable expenses can be deducted to reduce your taxable profit. Since April 2017, mortgage interest relief has been restricted — you can only claim basic rate (20%) tax relief on mortgage interest (Section 24).

Allowable expenses include: letting agent fees, buildings insurance, contents insurance, landlord insurance, maintenance and repairs (but not improvements), legally required certificates (gas safety, EICR), advertising for tenants, accountancy fees, and phone/postal costs relating to the let. You cannot deduct: capital improvements, mortgage principal repayments, personal expenses, or costs for periods when the property was not available to rent.

Section 24 of the Finance Act 2015 (sometimes called the "landlord tax") restricts the amount of mortgage interest you can deduct from rental income. Since April 2020, you can only deduct basic rate (20%) tax relief on mortgage interest, rather than the full amount. For higher-rate taxpayers in a 40% bracket, this significantly increases the tax payable on rental income. It has made many previously profitable let-to-buy arrangements considerably less lucrative.

You must register for Self Assessment if you receive rental income that exceeds your Personal Savings Allowance (£1,000 for basic-rate taxpayers) or £2,500 in gross rental income. If your property income is below £1,000 per year you may be able to use the Property Income Allowance instead. Register at HMRC.gov.uk before 5 October following the tax year in which you first received rental income.

Yes. Buy-to-let properties are subject to Capital Gains Tax (CGT) on the profit made when you sell. The current rates are 18% (basic rate) and 24% (higher/additional rate) for residential property. You can deduct purchase and sale costs plus improvement costs from the gain. From April 2020, you have 30 days to report and pay CGT after selling a UK residential property — even if no tax is due, you must still report the sale.

The old "wear and tear allowance" (10% of rental income tax-free) was abolished from April 2016. Instead, you can now deduct the actual cost of replacing furnishings, appliances, and equipment in the property. Keep all receipts. This means if you spend money replacing a broken appliance or worn carpet, you can deduct the full cost as an expense.