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bigduckontax, Accountant
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I'm of the opinion that the new mortgage interest tax

Resolved Question:

I'm of the opinion that the new mortgage interest tax relief rules (as announced in the summer budget 2015) only apply to an individual if they have less than a set number of rental properties. Can anyone confirm this please?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

The new rules are as follows and come in over a number of years, 2017 - 2021. Effectively they reduce landlord's tax relief to the basic rate of taxation only.

Here is an extract from the Gov UK web site:

'Landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs.

Landlords will be able to obtain relief as follows:

  • in 2017 to 2018 the deduction from property income (as is currently allowed) will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction
  • in 2018 to 2019, 50% finance costs deduction and 50% given as a basic rate tax reduction
  • in 2019 to 2020, 25% finance costs deduction and 75% given as a basic rate tax reduction
  • from 2020 to 2021 all financing costs incurred by a landlord will be given as a basic rate tax reduction'

I do hope that my reply has been of assistance.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 months ago.

Thank you for your support.

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