On the 6th of April 2017 the government changed theway landlords are taxed in the UK.
The changes will:
· affect you if you let residential properties as an individual, or in apartnership or trust
· change how you receive relief for interest and other finance costs
· be gradually introduced over 4 years from April 2017
Finance costs won’t be taken intoaccount to work out taxable property profits. Instead, once the Income Tax onproperty profits and any other income sources has been assessed, your IncomeTax liability will be reduced by a basic rate ‘tax reduction’. For mostlandlords, this’ll be the basic rate value of the finance costs.
Who will the changes affect?
Thesechanges will only affect landlords in the list below who have a mortgage fortheir rental property.
· Any UKresident individual who lets a residential property in the UK or overseas
· Anynon-UK resident individual that lets a residential property in the UK
· Anindividual who lets residential property in partnership with others
· Trusteesof a trust directly holding UK residential property
NOTE:These tax changes will not apply to landlords of furnished holiday lets andcommercial properties.
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