You asked about the tax implications of renting and selling:
RENTING - the main tax issue is income tax which is charged on the owner or owners based on the excess of rental income over deductible expenses. If you have to incur the cost in running the property, it is probably deductible, but setup costs (furniture bought for the first time and all the renovation costs) are probably not deductible.
You can look at pages from the self-assessment return for land and property on the Inland Revenue website. The relevant self-assessment pages are labelled SA105 and there are notes to go with it which are a starting point. For the grey areas you need to ask a professional.
If the property is owned by a company, similar rules apply, but the tax is called corporation tax and is at very different rates from income tax.
SELLING - here the tax is called capital gains tax. The calculation starts by comparing what you sold the property for with what it cost you (including improvement costs). It is levied as if it were the top slice of your income (so at up to 40%), but there are a number of reliefs available such as an annual exemption (for individuals) and taper relief if you have owned the property for a number of years. Rules for companies are now very different (since 1998).
An important exemption for individuals is the principal private residence exemption which Demetris referred to. This is available to exempt a proportion of the gain arising on a property which you have occupied as your main residence.
Huw Williams
enquiries@huwwilliams.co.uk