6 Apr

Restricting Finance Cost Relief for individual landlords from 6 April 2017

From 6 April 2017, the law regarding the deduction of mortgage interest to calculate the taxable rental profit by individual landlords will change. From now, mortgage interest relief will be restricted to basic rate (20%) income tax and this will be phased in over four years from April 2017, as follows:

Tax year 2017/18 – 75% of mortgage interest will be fully allowable and the remaining 25% available at the basic rate;

Tax year 2018/19 – 50% of mortgage interest will be fully allowable and the remaining 50% available at the basic rate;

Tax year 2019/20 – 25% of mortgage interest will be fully allowable and the remaining 75% available at the basic rate; and

Tax year 2020/21 – mortgage interest deduction will only be given at the basic rate.

Further details can be found in
https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords

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