Inherited Property and Rental Income: Avoiding Tax Pitfalls

Inheriting a property and renting it out seems simple — but tax on rental income from inherited assets is one of HMRC’s most overlooked compliance areas.

If you’re receiving rent from a property you inherited, you must declare it — even if it’s just covering costs.

When does rental income become taxable?

As soon as a property begins generating income, you must:

• Register for Self Assessment (if not already)

• Report rental profits after allowable expenses

Common traps to avoid:

• Assuming income is tax-free until probate is complete

• Delaying reporting because you haven’t received formal rental agreements

• Claiming non-allowable expenses (e.g. probate fees, private travel)

Even if you’re managing the property short-term before sale, that rental income must be declared.

Why is HMRC targeting inherited property income?

HMRC uses Land Registry records, estate valuations, and council tax data to identify people letting out inherited homes. Many accidental landlords are unaware they’ve triggered a tax obligation.

How we can help

We can:

• Trace the start of your rental activity

• Calculate profits over past years

• Guide you through the Let Property Campaign to correct underreporting

• Liaise with HMRC to limit penalties

Protect your inheritance — and yourself — by getting expert advice.

contact@tax-dispute-experts.com

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