The changes to how rental income from buy to let properties continues to evolve and has moved into its next phase.
Entry into a new tax year has prompted several questions from clients, so we thought it would be wise to recap on how you may be affected.
As advised in previous newsletters, the deduction of finance costs, including mortgage interest, is being phased out until they can no longer be deducted at all in 2020/21, when calculating taxable income.
In addition to this, the amount of tax relief that you can claim on finance costs will be capped at the basic rate of tax, this is currently 20%, and will be given by a reduction to your tax liabilities.