Finance & Tax Helpful Tips

Take control of your finances throughout the 2017-18 property tax year

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Sarah Waddleton
Written by Sarah Waddleton

Following the changes to Mortgage Interest Relief on 1st April, 2017 is the first of the four ‘phase’ years which will see the introduction of the new tax rules.

2017-18 – the deduction from property income will be restricted to 75% of the finance costs incurred, with the remaining 25% being available as a basic rate deduction.

2018-19 – the deduction from the property income will be restricted to 50% of the finance costs incurred with the remaining 50% being given as a basic rate deduction.

2019-20 – the deduction from property income will be restricted to 25% of the finance costs with the remaining 75% being given as a basic rate deduction.

In light of these changes our new property tax spreadsheet provided by our tax partner RITA4RENT is now available and will ensure your data is recorded correctly in line with the new tax rules.  Designed with simplicity in mind the spreadsheet enables thorough record keeping, and will allow a compare and contrast for up to ten properties on the same page.

The benefits of keeping accurate financial records are many:

  • Improved understanding of income, costs and profit
  • Better equipped to deal with any HMRC investigation
  • Reduction in accountancy and tax advisory fees
  • Simple identification of deductions when calculating Capital Gains Tax

As HMRC continue investigating landlords who evade tax now is this time to ensure your finances are in check.

If you are looking for further information on tax, why not check out our taxes courses, we offer courses on Property Tax, Capital Gains Tax and Inheritance Tax.

Download our new Property Tax spreadsheet today.

 

About the author

Sarah Waddleton

Sarah Waddleton

Sarah works in the RLA Marketing Department.

2 Comments

  • My understanding of the new MIR rules was that anyone whose gross income remained within the BR threshold would STILL be entitled to claim all of their interest at BR% (as a credit), despite the reduction over the 4 years. That’s how most of the guidance out there reads too. i.e. the calculators I’ve used show NO NET difference to the tax I’ll pay.
    Have I really got it wrong, then? Thanks in advance if you can clarify, please?

  • My apologies, Sarah! I misinterpreted your comments! Now I’ve re-read it, I’m happy it won’t affect me financially. (Unless you can manually delete these 2 posts?)

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