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HOME / KNOWLEDGE / BUY TO LET MORTGAGE RESTRICTIONS

BUY TO LET MORTGAGE RESTRICTIONS

How do the the new Buy To Let Tax Rules impact you?

In 2015, the then Chancellor George Osborne announced major plans to restrict tax breaks for residential buy-to-let landlords which could see half of their profits wiped out.

Gradually phased in over 4 years from April 2017, the change means mortgage interest relief along with arrangement, booking and valuation fees will be restricted to the basic rate of tax of 20%. Relief will be given as a reduction in tax liability instead of a reduction to taxable rental income.

TAX RELIEF

Prior to 2017, landlords were able to offset all of their mortgage interest charges against their rental income.

In 2017-18, the tax relief claimable reduced to 75%, and in 2018-19, 50%. For 2019-20, it is currently only 25%.

From 6 April 2020, tax relief will be restricted to the basic rate of income tax, currently 20%. Relief will be given as a reduction in tax liability instead of a reduction to taxable rental income.

How do the the new Buy To Let Tax Rules impact you?
Tax Year

 

Prior to 2017

2017-18

2018-19

2019-20

April 2020

% of mortgage interest payments deductible from rental income

100%

75%

50%

25%

0%

% of mortgage interest payments qualifying for 20% tax credit

0%

25%

50%

75%

100%

INTRODUCTORY MEETING

CONTACT US TO ARRANGE AN INTRODUCTORY MEETING, OR FOR A QUOTE.

Ian Leigh - Worldwide Disclosure Facility

IAN LEIGH

Tax Partner


Ian is a Chartered Accountant who has specialised in tax since 1985. Ian advises owner managed businesses, public companies, private clients and trusts on the broad range of taxes and has extensive experience of international tax, domicile and residence issues. Ian also has significant experience in dealing with HMRC tax investigations and disputes including Section 9A enquires, the Worldwide Disclosure Facility Code of Practice 9 and the Contractual Disclosure Facility.
Worldwide Disclosure Facility - Andrew Lewis

ANDREW LEWIS

Tax Manager


Andrew manages the firms personal tax department, including a portfolio of personal tax clients such as High Net Worth Individuals, Self Employed, Directors, Landlords, Non-Residents and Partnerships. Andrew also has significant experience in dealing with HMRC tax investigations and disputes including Section 9A enquires, the Worldwide Disclosure Facility (WDF), Code of Practice 9 and the Contractual Disclosure Facility.
Bhimal Hira
Bhimal Hira

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