Landlord Tax
A reminder to all landlords the 6th April 2017 sees the first phase in the restriction of mortgage interest able to be claimed as tax deductible by landlords.
The final phase will eventually bring the maximum down to the basic rate in 2020/21.
The Government paper is here:
https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords
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
According to Government figures they are expecting to raise an additional £1.3BN in tax revenue by 2021.
