Individuals who receive rental income from letting their properties are about to see major changes in the way their rental income is taxed. From April 2017, landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs. This measure, which was announced in Summer Budget 2015, will restrict relief for finance costs on residential properties to the basic rate of income tax. If you are a landlord with properties with significant mortgages or loans, you may soon see a major increase in the amount of income tax you are expected to pay. It is therefore essential that you consider your options now. Please contact Alan Ford or your usual Beavis Morgan Partner if you would like to explore your planning options in more detail.
