Personal and business tax

How do I receive trading and property income allowance?

Property income allowance is a £1,000 annual tax-free allowance that UK taxpayers can claim against rental income from residential properties. This HMRC allowance reduces your taxable property income, meaning you pay no tax on rental income up to £1,000 per year, or you can deduct £1,000 from higher rental income instead of claiming actual expenses.

By
Jordan Macey
Last updated
July 23, 2025
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How do I receive trading and property income allowance?

"According to HMRC, you can claim trading allowance if you have trading income from:

  • Self-employment
  • Casual services
  • Hiring personal equipment

You can claim the property allowance if you have income from land or property.

You won't be able to claim the allowances if you have trade or property income from:

- A business that you or an individual connected to you owns or controls

- A partnership where you or individuals connected to you are partners

- Your employer, or your spouse's or civil partner's employer

You can't claim the property allowance if claim:

- Claim the tax reducer for finance costs such as mortgage interest for a residential property

- Deduct expenses from income from letting a room in your own home, instead of using the Rent a Room Scheme"

"According to HMRC, you can claim trading allowance if you have trading income from:

  • Self-employment
  • Casual services
  • Hiring personal equipment

You can claim the property allowance if you have income from land or property.

You won’t be able to claim the allowances if you have trade or property income from:

- A business that you or an individual connected to you owns or controls
- A partnership where you or individuals connected to you are partners
- Your employer, or your spouse’s or civil partner’s employer

You can’t claim the property allowance if claim: 

- Claim the tax reducer for finance costs such as mortgage interest for a residential property 
- Deduct expenses from income from letting a room in your own home, instead of using the Rent a Room Scheme"

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