Landlord Tax - 2017

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    Landlord Tax - 2017

    Reading through the posts, I can't see a clear answer on how mortgage interest is going to be viewed by the government. I,e, is it still regarded as a business expense or not?

    The last few posts I've read seem to be along the lines of the mortgage interest won't be seen as a business expense anymore. To the regular posters on this forum, is this correct?


    If so, for example:

    Previous rental profit £15k, so tax at 20% = £3000.00

    Rental profit, plus mortgage interest = £35k, so new tax as of 2017 would equal = £7000


    Grateful for clarification if it does exist yet.

    Many thanks
    MAPTON

    #2
    Yes, that is correct - loan interest will no longer be a busiiness expense for a property rental business (individual landlord).

    The interest deduction will be given in terms of Basic Rate Tax.

    Comment


      #3
      added the word relief!

      Originally posted by MAPTON View Post
      Previous rental profit £15k, so tax at 20% = £3000.00

      Rental profit, plus mortgage interest = £35k, so new tax as of 2017 would equal = £7000
      If you have interest payments of £20k you would deduct 20% of the interest from the tax due as the restricted tax relief due - £4k
      So your tax would be unchanged in that example at £3,000

      Obviously if that knocks you over into higher rate tax band you would pay more tax.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        jpkeates,

        I don't understand that. Currently, if my mortgage interest PA is £20k, if I am no longer allowed to offset the £20K, then surely my tax bill in respect of the mortgage interest is a further £4k per year?

        Comment


          #5
          The mortgage relief is restricted to the base rate of tax, not removed altogether.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment

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