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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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2016/2017 moved out of residential property September 2016

Customer Question

2016/2017 moved out of residential property September 2016 was available for rent but did not rent out till Feb 2017 (referencing fell through lack of demand etc) received rent 22 febraury onwards can i claim/offset mortgage interest and coucil tax insurace from september 2016 or only from when rent recieved?
Submitted: 21 days ago.
Category: Tax
Expert:  bigduckontax replied 21 days ago.

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

Remember that mortgage interest is only allowable at the basic rate of income tax. Here is the advice from Turbotax [edited]:

'If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses for managing, conserving, or maintaining the property while the property is vacant. However, you cannot deduct any loss of rental income for the period the property is vacant.'

\i do hope that you have found my reply of assistance.

Customer: replied 21 days ago.
Sorry no not clear eniterlyIm asking abo0ut tax year 2016/17 before BTL tax changes. I think all 100% of mortgage interest is deductible as an expense, im asking for clarification that I can start calcluating that expense from the time thew property become available for rent and was vacant as I am now at another address? therfore deduct the interst payments from the rent received and if a loss carry forward to 2017/2018?
Expert:  bigduckontax replied 21 days ago.

You are quite right, here is the actual allowable rates:

'In the 2017-18 tax year, you can claim 75% of your mortgage tax relief. in the 2018-19 tax year, you can claim 50% of your mortgage tax relief and in the 2019-20 tax year, you can claim 25% of your mortgage tax relief'

You can deduct and any loss carried forward, but only against future rental incomes. You can deduct from the time when the premises became available to rent as I told you.

Customer: replied 21 days ago.
but I am asking about 2016/2017
Expert:  bigduckontax replied 21 days ago.

In 16/17 100% of the interest was deductible. The restrictions only started in 17/18.

Customer: replied 21 days ago.
you have failed to answer my question.........For tax year 2016/2017 are mortgage interest, council tax and insurances allowable as a deductible expense from the point where the property became available for rent which was September 2016 or only from when the property was actually rented out and receiving rent which was from Februray 2017
Expert:  bigduckontax replied 21 days ago.

From the time the property was available for rent.