Letting agents and AML: the £10,000 monthly rent threshold since 30 June 2026

Letting agency work comes under the anti-money laundering (AML) rules of the Money Laundering Regulations 2017 only for a let of a month or more at a rent of £10,000 a month or more for at least part of the term. Since 30 June 2026 that line has been in pounds. Before then it was 10,000 euros, about £8,658 a month at HMRC’s exchange rate for June 2026, so a let at £9,000 a month that was caught until 29 June is not caught now.

For the lets that are caught, the agency must be on HMRC’s register before it does the work, check who both the landlord and the tenant are before the agreement is made, and keep those records for five years. Each rule below, with the regulation behind it, was read on legislation.gov.uk and GOV.UK on 25 October 2026. The money laundering rules apply across the UK; the two points that are England only say so.

What changed on 30 June 2026

The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (SI 2026/621) were made on 9 June 2026 and came into force 21 days later, on 30 June. They put the euro sums in the 2017 Regulations into pounds. Three changes reach letting agents:

• Regulation 8 puts £10,000 in place of 10,000 euros in the definition of letting agency work (regulation 13(4)(b)(ii) of the 2017 Regulations).
• Regulation 14 does the same in the letting agents’ due diligence rule (regulation 27(7A)) and limits that rule to an "occasional" transaction, one outside a business relationship. A business relationship needs due diligence anyway, under regulation 27(1)(a).
• Regulation 39 does the same in Schedule 9 to the Proceeds of Crime Act 2002, so the duty to report a suspicion follows the same line.

HMRC’s letting agency page (last updated 4 April 2023) and its sector guidance (31 January 2024) still give the line in euros. The regulation is the law, and it has said £10,000 since 30 June 2026.

Lets between about £8,658 and £10,000 a month fell out of scope on 30 June. If they were your only reason to register, check the whole book first: an agency that also sells property is an estate agent, in scope at any price. HMRC asks a business that no longer provides a service the regulations cover to deregister. Neither that page nor SI 2026/621 says what happens to the due diligence files already made, so the careful course is to keep them for the five years in regulation 40, counted from the end of each relationship, rather than clear them out on deregistering.

Which lets are caught

Regulation 13(4) makes work letting agency work when three things are true:

1. 1The instruction. The work is done for a landlord looking for a tenant, or for a tenant looking for somewhere to rent.
2. 2The term. An agreement is concluded for a term of a month or more.
3. 3The rent. For at least part of the term, the rent is, or is equivalent to, £10,000 a month or more.

HMRC’s guidance adds that the line applies to residential and commercial lets alike, counts the rent only, not deposits or floats, and makes due diligence best practice where an agreement’s length is unclear but could meet the definition.

"At least part of the term" catches a stepped rent from the first day. A five-year let at £9,500 a month that rises to £10,070 in its second year is caught at the start, and HMRC’s guidance says the due diligence must then be done before the agreement is signed.

The regulations give no method for a weekly or yearly rent, so the plain way is to count it over a year: £10,000 a month is £120,000 a year, or about £2,308 a week (£2,308 × 52 ÷ 12 = £10,001.33).

What is not letting agency work

• Advertising, or giving a landlord and a tenant a way to contact each other, as a property portal does, if the firm does nothing else within the definition (regulation 13(5) and (6)).
• Legal services from a solicitor or other legal representative, on the same condition (regulation 13(6)(d)).
• A let for less than a month in total.
• A private landlord letting without an agent, or property management with no letting work, in HMRC’s reading.

Registering with HMRC

HMRC supervises letting agents unless one of the professional bodies in Schedule 1 to the 2017 Regulations already does (regulation 7(1)(c)(vii)). Schedule 1 lists accountancy, tax, insolvency and legal bodies, and no letting or estate agency body, so membership of Propertymark, RICS or a redress scheme does not replace HMRC registration.

A letting agent must not carry on the business unless it is on HMRC’s register, or has applied and is waiting for a decision (regulation 56(6)). HMRC calls trading while unregistered a criminal offence. In the online service, choose estate agency business first, then letting agency business as the activity under it.

The agency’s beneficial owners, officers and senior managers (HMRC calls them BOOMs), and a sole practitioner, need HMRC’s approval (regulation 26). HMRC’s guidance leaves out managers who are not routinely involved in the agency’s anti-money laundering procedures. The check looks for an unspent conviction for a relevant offence. HMRC registers a new business only once all its BOOMs are approved. Someone who joins later can start once their application is in, but must stop at once if they fail the check.

What registration costs

HMRC’s fees, as they stand since 1 December 2025:

An agency with two offices and three people to approve pays £300 + £800 + £120 = £1,220 to register, then £800 a year, plus £40 for each new person who needs approval. A business with turnover under £5,000 can claim the small business reduction, a £500 refund once the application or annual declaration is accepted. Premises include virtual offices and agents’ premises, but not a place used only to store records or to train or manage staff.

The checks on the landlord and the tenant

HMRC expects both to be checked, but the rule behind it depends on how the agency is engaged. For a one-off let, an occasional transaction, regulation 27(7A) and (7B) require due diligence on both the person letting the property and the person renting it. An agency instructed by a landlord on an ongoing basis has a business relationship, which needs due diligence under regulation 27(1)(a). There, HMRC’s sector guidance says the landlord and the tenant must both be treated as customers, with the relationship with the tenant starting when the tenant’s offer is accepted. HMRC also asks you to consider whether a guarantor is your customer too, and to include the trustees of a letting arrangement.

For each of them, regulation 28 asks you to:

• identify them, and verify who they are from documents or information from a reliable source independent of them (an official document counts, even when they hand it to you);
• for a company, verify its name, number and registered office, find out who its directors are, and identify who ultimately owns or controls it, not from the Companies House register alone;
• understand the purpose of the relationship, which for a let is usually plain;
• keep monitoring the relationship while it lasts.

When to check

Verification comes before the business relationship starts or the transaction is carried out (regulation 30(2)). HMRC asks for the due diligence on the landlord, the tenant and any trustee to be complete before the agreement is made, so tell a serious applicant early that you will need their documents at that point.

Renewals count. HMRC asks for due diligence when an agreement is renewed, though not where a tenancy simply carries on as a periodic one. In England that comes up mostly at this rent. Since 1 May 2026 a private assured tenancy in England is periodic (Housing Act 1988, section 4A), with no fixed term to renew. But a tenancy with rent above £100,000 a year (not counting sums for rates, council tax, services, management, repairs, maintenance or insurance) cannot be assured at all (Housing Act 1988, Schedule 1, paragraph 2), and £10,000 a month is £120,000 a year. While the rent is above that line, the let can run for a fixed term and come up for renewal.

Enhanced checks and warning signs

Regulation 33 requires enhanced due diligence where your risk assessment finds a high risk, and in set cases: a customer who is a politically exposed person, or a family member or close associate of one (regulation 35); a party established in a country on the Financial Action Task Force’s call for action list; false or stolen identity documents where you still mean to go ahead; and a transaction unusually complex or large for its kind.

HMRC’s warning signs on a let include a client whose lifestyle does not match the rent, a client who asks to pay all or a large part of a long let up front in cash or cleared funds, costs paid by someone with no clear link to the let, and a let agreed without the tenant viewing. HMRC also warns of a would-be tenant who pays a holding deposit, drops out and asks for it back.

A sign is not proof. Where it leads to knowledge or suspicion of money laundering, the nominated officer decides whether to send a Suspicious Activity Report to the National Crime Agency. In the regulated sector, failing to report and tipping someone off are both offences under the Proceeds of Crime Act 2002.

Written systems and a nominated officer

An HMRC officer on a compliance visit focuses on the agency’s written systems. The 2017 Regulations ask for a written risk assessment covering your clients, the places you work, your services, your transactions and the way you deal with clients (regulation 18); written policies, controls and procedures in proportion to the agency’s size, approved by senior management (regulation 19); a nominated officer who receives staff concerns and decides on reports to the National Crime Agency, with HMRC told within 14 days of the appointment (regulation 21(3)); and regular staff training, with a written record (regulation 24). Where the agency’s size and nature make it appropriate, it also needs a board member or senior manager responsible for compliance, screening of relevant staff and an independent audit function (regulation 21(1)).

A sole practitioner who employs nobody and does not act in association with anyone else needs neither a nominated officer nor a compliance officer (regulation 21(6)). The other duties of an agency, client money protection and redress among them, are in the letting agent compliance checklist.

Records: five years, then delete

Regulation 40 asks you to keep copies of the documents and information from your due diligence, and enough records of each transaction to reconstruct it. Keep them for five years from the end of the business relationship, or from the date a one-off transaction completed; transaction records inside a relationship need not be kept beyond 10 years. Then the personal data gathered under the regulations must be deleted, unless another law or legal proceedings require it, or the person has consented.

In England the same passport can sit under two clocks. A Right to Rent copy must be kept for at least one year after the tenancy ends (article 5 of SI 2014/2874). The money laundering copy is kept for five years from the end of the relationship, then deleted. Keep them as separate records, so that clearing out Right to Rent copies does not delete a due diligence file early, or keep one past its time. The wider rules on tenants’ personal data are in landlord GDPR and data protection.

Penalties

HMRC can impose a civil penalty "of such amount as it considers appropriate", publish a statement censuring the business, or both, and can also penalise an officer knowingly concerned in the breach (regulation 76). There is no fixed maximum. HMRC weighs the reason for the failure, its seriousness, the business’s history and size, any benefit gained and the amount exposed to money laundering, and reduces the penalty for a disclosure made before HMRC gets in touch.

HMRC adds a sanctions administration charge of £2,000 to a penalty for failures in customer due diligence, registration, policies, record keeping or risk assessment. Where the penalty is under £2,000, the charge is capped at the penalty. Since 1 December 2025 the charge also applies when HMRC suspends or cancels a registration, publishes a censure or bars someone from management. HMRC can publish the business’s name on its list of businesses that have not complied.

A breach can also be prosecuted: up to two years in prison, a fine or both on indictment, and up to three months on summary conviction (regulation 86). Both routes share one defence, that you took all reasonable steps and exercised all due diligence to comply.

Keeping each let’s file together

Keep the high-rent lets and their paperwork in one place. In a LetCompliance agency workspace each landlord client has a record of its own: contact details, fee and management terms, the dates the terms were sent and the agreement signed, notes, and every property you manage for them, with the rent received and the statements. Each tenancy holds the tenant, the signed agreement and the Right to Rent check, and the properties table sorts by rent, so the lets at £10,000 a month or more sit together at one end of it. The due diligence itself stays your job. LetCompliance flags Right to Rent copies for deletion one year after the tenancy ends, so file the money laundering check as its own document on the property.