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.