Buy to let residential properties – New HMRC rules from April 2017
In just over a months’ time the rules for claiming back mortgage interest relief on buy to let properties will change. Previously, owners of buy to let properties were able to use mortgage interest as an allowable expense when working out their rental profits or losses.
From April 2017, the ability to claim back relief with mortgage interest will be reduced over the next three years until we get to 2020/21. From that point onwards, buy to let property owners will be only allowed to claim back a basic tax rate deduction of 20% from their tax bill in respect of their rental properties.
As well as hitting higher and additional rate taxpayers this could also have an effect on basic rate taxpayers. Disallowing mortgage interest as a genuine cost could mean the basic rate taxpayer going above the threshold into higher rate due to increased rental profits.
We at AIMS would like to help buy to let landlords to find possible solutions.
Interested in finding out more? Why not pick up the phone and speak to an Aims Accountant.
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