Hi.The mortgage interest is deductible from the rent, the capital repayments aren't. The cost of the property is taken into account in calculting the capital gain or loss on the sale of the property.The let property campaign is detailed here. You don't have to take advantage of the campaign but you will benefit from a lower penalty if you do. Any taxpayer who dislcoses their rental income other than through the campaign may have to pay a much larger penalty but may also be able to negotiate a longer period to pay the tax over.If I were you, I'd appoint an accountant or tax adviser to do the calculations for you and to make sure you are claiming all the expenses you can claim. Some are listed here.HMRC are much more vigorous at chasing payment of taxes these days and they even use commercial debt collectors who are obviously paid on results so they are more difficult to deal with than HMRC tax collectors. You really need to avoid having those people knock on your door.I cannot advise you on ways of raisng money to pay the tax since I'm not allowed to do so but you really need to start thinking about it if you wish to use the let property campaign and benefit from the lower penalty. There are some notes on tax payments problems and the action you should take here. Ultimately, if you don't use the campaign, you will have to negotiate a payment plan with the tax office which will be difficult and stressful but it will need to be done as the tax liabilities will not go away. If you can find a way of settling in three months then you should.I hope this helps but let me know if you have any further questions.