Buy to let residential properties – New HMRC rules from 6th April 2017
Our job is to make our clients’ lives easier: we pride ourselves in demystifying the rules around tax for small- and medium-sized businesses. With the coming of a new financial year, there’s no better time to put our expertise to the best use.
Amongst the new rules brought in are revisions for claiming back mortgage interest relief on buy to let properties. Previously, landlords of these properties could use mortgage interest as an allowable expense when working out their rental profits or losses.
This, however, will not last much longer – the ability to claim back relief with mortgage interest will be gradually reduced over the next three years until 2020/21, which could make a big difference to the way landlords think about their properties.
From that point onwards, buy to let property owners will only be allowed to claim back a 20% basic tax rate deduction of mortgage interest from their rental properties tax bill.
The rules are counter intuitive, because “buy to let is a business” and normally interest relating to the business is deductible as a business expense. But not anymore if your business is buy to let. If it sounds complicated, wait until you read the details of the new rules. It is more than complicated, because you need to prepare all you tax calculations before you can find out what the interest relief is. At AIMS, we dive into the myriad changes to the way you pay tax so you don’t have to, and our expertise can help shape your financial security.
We are not trying to impress you what clever accountants we are and giving you chapter and verse of all the rules – you know you haven’t got the time, and you need to focus on what is most important to you: running and developing your business – so leave it to us or another qualified accountant to assist (and whilst we would love to hear from you, if you chose another accountant just make sure they are fully qualified!)
If you are interested in finding out more, why not pick up the phone and speak to an AIMS Accountant?
AIMS Accountants for Business – if you like the way we think, you will like the way we work.