Published 17th February 2020; Updated: April 2021
Still puzzled by the S24 restriction or finance cost relief? See the easy to read full explanation.
From 6th April 2020 the tax relief that landlords of residential properties get for finance costs is being restricted to the basic rate of Income Tax. The finance cost relief is now given as a reduction in tax due.
The reduction is the basic rate value (currently 20%) of the lower of:
The tax reduction can’t be used to create a tax refund.
If the basic rate tax reduction is calculated using the ‘property business profits’ or ‘adjusted total income’ then the difference between that figure and ‘finance costs’ is carried forward to calculate the basic rate tax reduction in the following years.
The information contained in this newsletter is believed to be correct at the time of publication. The content of this newsletter is intended to be a brief summary of the principal points of the legislation or proposed legislation only, and it is provided for general guidance only. It may not take into account subsequent changes in the law and of necessity it omits much detail. Taxation is a complicated subject and is subject to change. You should only rely on advice prepared specifically for you. Neither the writer nor Landlords Tax Services Ltd can be held liable for any loss arising from any act or omission by you as a result of your understanding of this article. If the subject matter is of interest you should contact us to see if there is a relevant update, and to take professional advice which takes into account your circumstances.
Landlords Tax Services Ltd, specialises in the taxation of residential property income and gains and more than half its clients are resident outside the UK. If you would like specialist help contact Maurice Patry F.C.A .at email@example.com or for more information visit our website at Landlords Tax Services Ltd.
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