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Rakhi Vasavada
Rakhi Vasavada, Financial Advisor
Category: Finance
Satisfied Customers: 4556
Experience:  Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years
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Mortgage interest on buy-to-let mortgages Mr A understands

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Mortgage interest on buy-to-let mortgagesMr A understands that currently full amount of mortgage interest on a buy-to-let property can be deducted against rental income.However, Mr A is awware that the rules are changing and will be phased in where only a % of mortgage interest will be allowable.Can you please explain what the change is?
From what date will it take effect?
If phased what are the phased changes?

Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

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 am sure this would help.

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Warm Regards,

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