You may have heard talk of the restrictions being imposed on landlords for finance costs incurred from April 2017, but do you really understand the new rules?
Here at Lambert Chapman LLP, our clients continue to send details of the full amount of mortgage interest suffered against their buy to let mortgages on rental properties. We then have to calculate the restriction, 25% for 2017/18, 50% for 2018/19, 75% for 2019/20, before full restriction from 2020/21. This adjustment gets reported on our tax system which in turn calculates the amount of basic rate tax relief available. However…
- Are you preparing your own Tax Return using HMRC’s online system?
- Do you have a let property, with mortgage interest paid?
- Did you know that you need to make this adjustment yourself?
HMRC’s online system does not prompt or remind you about this restriction and so by entering finance costs on your Tax Return and not including an adjustment (this shows in a separate box), you may be increasing the chances of an enquiry being raised.
Lambert Chapman LLP can assist you with your Tax Return or help to liaise with HMRC if an amendment to an existing Tax Return is required. If, for example, you have already submitted your form online and did not make the restriction adjustment, you have until 31 January 2019 to amend the form.
Please do get in touch with Angela Pannell from our Tax Department if you have any queries.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.