It was announced in the Budget that the government will restrict the amount of income tax relief landlords can claim on residential property mortgage interest costs to the basic rate of income tax.
This means that landlords will no longer be able to deduct all of their finance costs from their property income. They will instead be restricted to the basic rate. To give landlords time to adjust, the government will introduce this change gradually from April 2017, over four years.
This restriction will not apply to landlords of furnished holiday lettings and will not impact on basic rate tax paying landlords.
From April 2016 the government will replace the Wear and Tear Allowance with a new relief that allows all residential landlords to deduct the actual costs of replacing furnishings.
Internet link: TIIN landlords
For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on firstname.lastname@example.org.