Rental Income

Summary

• Enter gross rent and an expense ratio (typically 20-30%), which the engine deducts before tax.
• Linking a mortgaged property does two things: applies Section 24 relief on the mortgage interest (20%, rising to 22% from 2027/28), and nets the actual mortgage payment out of your cashflow so spendable income reflects the mortgage-net amount, not gross rent.
• Jointly owned? Tick Jointly owned on the property card to split gross rent automatically between you and your partner — no need to add two separate entries.
• The projection assumes today's mortgage rate holds for the rest of your plan. An interest-only balance is assumed to roll over indefinitely unless you tick "Repay in full at end of term" on the property.

How rental income is modelled

Set the property's What is this property? selector to Rental, then enter the gross rent and an expense ratio (maintenance, void periods, letting fees, insurance — typically 20-30%) right there on the card. The engine deducts the expense ratio before tax.

Giving a rental property a mortgage does two things, not just one:

1. Section 24 relief — a tax credit on the mortgage interest paid, capped by your income above the Personal Allowance. Currently 20%, rising to 22% for tax year 2027/28 onward alongside the wider property-income tax changes taking effect then.
2. Cashflow netting — the property's actual mortgage payment (interest and principal) is automatically deducted from this income in your projection, so what shows up as spendable cashflow is the real, mortgage-net amount, not gross rent. If the same property is linked from more than one rental income entry (e.g. a couple each declaring their share of one jointly-owned property), the one real mortgage payment is split between them rather than deducted in full from each.

Jointly-owned rental property

If you and a partner jointly own the property, tick Jointly owned once the property's set to Rental. Enter the total gross rent and use the slider to set each person's share (50/50 by default) — expense ratio, start age, and end age stay in sync between the two of you as you edit them. Each partner is then taxed on their own share at their own rate, and the property's Section 24 relief and mortgage payment are apportioned between the two shares automatically, matching how jointly-owned rental property is actually taxed.

If you want more control than a straight percentage split — different expense ratios or start dates between you, for instance — leave Jointly owned unticked and add each partner's share as its own entry instead: enter one partner's share from their own income section, then link the same property from the other partner's income section too. The mortgage payment splits between the two entries the same way either way.

Interest-only mortgages at the end of their term

By default, an interest-only mortgage's cost is assumed to continue for the rest of your plan — rolled over or remortgaged rather than paid off — since that's what most landlords actually do. If you do plan to clear the balance, tick Repay in full at end of term on the property: this models a one-off lump sum, equal to the outstanding balance, drawn from your other assets in the mortgage's final year.

What this doesn't account for

One thing this doesn't account for: the projection assumes today's mortgage rate and payment hold for the rest of your plan — it doesn't model remortgaging at a different rate.

Selling the property

Selling the property? Set its End Age to when the tenancy actually ends (which can be earlier than legal completion), set its Sale/Completion Age, then add the net proceeds as a Planned Lump Sum on the account you'll hold them in, linked to the property so it's excluded correctly from your estate for IHT purposes.

Frequently asked questions

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