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Landlords to receive less tax relief on interest

In a change that will impact residential landlords, the amount of income tax relief available on residential property finance costs will be restricted to the basic rate of income tax. This change, to be phased in over a four year period, will mean that landlords will no longer be able to deduct all of their finance costs from their property income. The restriction does not apply to residential properties held in companies.

Rules may also further restrict the relief which is due where the individual’s property income or total income is less than the amount on which basic rate relief is due.

The computation is complex so please do get in touch if you would like us to review your position.

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