LLP HMO Tax Calculator

Illustrate the income tax LLP members pay on HMO rental profit.

This calculator illustrates the income tax that individual LLP members pay on their equal shares of HMO rental profit, with mortgage interest relieved through the Section 24 basic-rate credit. It is an illustration only, not tax advice.

Your figures

Figures for the whole LLP for one year. Members are individuals sharing profit equally.

Annual rent

Running costs

Allowable costs such as bills, repairs, insurance and letting fees. Not mortgage interest.

Mortgage interest

Interest and other finance costs for the year.

Each member's other income

Salary or pension, before tax. The same figure is used for every member.

Members

Tax year

Your results

Income tax for all members, 2026/27

£15,092

53.9% of the £28,000 cash profit after interest

Per member

Measure	Each member	All 2
Profit share (before interest)	£24,000	£48,000
Interest share	£10,000	£20,000
Tax on share	£9,546	£19,092
Credit for interest	-£2,000	-£4,000
Income tax due	£7,546	£15,092
Net after tax	£6,454	£12,908

Cash profit (rent less costs and interest): £28,000
Income tax for all members: £15,092
Same profit taxed as a limited company (corporation tax only, before taking any money out): £5,320

Illustration only, not tax advice. Uses income tax rates for England, Wales and Northern Ireland. Your position depends on your full circumstances; speak to a qualified tax adviser before choosing how to own property.

Members are individuals with equal shares; corporate members are not modelled. Each member's tax is the extra income tax their share adds on top of their other income. Unused finance cost relief is not carried forward here.

The limited company figure is corporation tax only. Owners would pay further tax on any salary or dividends taken out, so it is not a like-for-like comparison.

Illustrative figures only, based on the numbers you enter. Not a mortgage offer.

How we calculate LLP income tax

Methodology and data sources, updated October 2026

Formulas

Each member's shares: Profit share = (Annual rent - Running costs) ÷ Members; Interest share = Mortgage interest ÷ Members
An LLP is tax transparent, so the LLP itself pays no income tax. Each member is taxed on their share of the property profit. Shares are equal in this calculator.
Tax on the share (before credit): Income tax on (Other income + Profit share) - Income tax on Other income alone, before the finance cost credit
The profit share is added on top of the member's other income and taxed at the property income rates for the tax year. Mortgage interest is not deducted (Section 24).
Credit for interest (Section 24): Credit = Basic rate × lower of (Interest share, Profit share, Income above the personal allowance)
The basic rate is 20% for 2026/27 and 22% for 2027/28 (the new property basic rate).
Income tax on the share: Tax on the share (before credit) - Credit for interest
The extra income tax the LLP profit adds to the member's bill. Total income tax is this figure added up across all members.
Net after tax: Profit share - Interest share - Income tax on the share
The member's share of the cash profit after their income tax.
Effective rate on the cash profit: Total income tax ÷ (Annual rent - Running costs - Mortgage interest) × 100
Shown only when there is a cash profit after interest.
Limited company comparison (before extraction): Corporation tax on (Annual rent - Running costs - Mortgage interest)
A company deducts mortgage interest in full and pays corporation tax at 19% up to £50,000, 25% from £250,000, with marginal relief in between. This is the company's tax only, before any salary or dividends are paid to the owners, so it is not a like-for-like comparison with the members' income tax.

Data sources

Yes:GOV.UK: Changes to tax rates for property, savings and dividend income (November 2025 Budget)
Yes:GOV.UK: Income Tax rates and Personal Allowances
Yes:GOV.UK: Corporation Tax rates and marginal relief

Key assumptions

Profit sharesEach member takes the same share of profit and interest.: Equal
Other incomeOne figure is applied to all members to keep the inputs short. Use the LLP profit distribution calculator for different incomes or shares.: Same for every member
Tax ratesScottish income tax rates are not modelled.: England, Wales and Northern Ireland
Types of incomeEach member's other income is treated as employment or pension income. Savings income and dividends are not included.: Other income and property profit only
Not includedNo pension contributions, Gift Aid, student loans or National Insurance.: Reliefs and deductions
Section 24 carry forwardFinance cost relief that cannot be used in the year is not carried forward.: Not modelled
MembersCorporate members are not modelled.: Individuals only
Limited company comparisonCorporation tax uses the small profits rate, main rate and marginal relief for a single company.: No associated companies

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