The Book-keepers Forum (BKF)
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Mortgage interest relief for landlords
Post Info TOPIC: Mortgage interest relief for landlords
MichaelWGroves


Senior Member

Status: Offline
Posts: 101
Date:
Mortgage interest relief for landlords
Permalink Closed

I'm hoping someone can explain how the recent budget affects this. I was working on the bases that say gross rent is £20k and mortgage interest is £10k my gross profit is £10k. I pay higher rate tax at 40% so my net profit is £6k. I don't understand how the recent budget affects this? Thanks Michael

__________________
RobH


Expert

Status: Offline
Posts: 1963
Date:
Permalink Closed

So currently you would be getting tax relief at your marginal rate (40%) Michael and you would have a tax bill of £4000 (40% of £10 profit). the new rule says you can only get 20% relief, therefore it is more of a tax reducer. The new computation would look something like this:

Receipts £20,000

Tax @ 40% £8000

Less interest relief (20% of £10,000) (£2000)

Tax payable £6000

So you will be £2k worse off I'm afraid.



__________________
Rob
www.accounts-solutions.com
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Mortgage interest relief for landlords
Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About