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Property income 

Currently, individual landlords can deduct their costs - including mortgage interest - from their profits before they pay tax, giving them an advantage over other home buyers. Wealthier landlords receive tax relief at 40% and 45%. This tax relief will be restricted to 20% for all individuals by April 2020.

Landlords will be able to obtain relief as follows:

- in 2017-18 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 2018-19, 50% finance costs deduction and 50% given as a basic rate tax reduction. 
- in 2019-20, 25% finance costs deduction and 75% given as a basic rate tax reduction. 
- from 2020-21 all financing costs incurred by a landlord will be given as a basic rate tax reduction.

In addition, from April 2016, the 'wear and tear allowance', which allows landlords to reduce the tax they pay (regardless of whether they replace furnishings in their property) will also be replaced by a new system that only allows them to get tax relief when they replace furnishings.

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Added By: Luke Noble on 10th Jul 2015 - 13:59
Number of Views: 969
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