Legislation to be introduced gradually from 6 April 2017 will restrict finance cost-relief for individual landlords.
New legislation will mean that landlords will no longer be able to deduct all of their finance costs from their residential 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 will be introduced gradually from 6 April 2017.
With effect from April 2016 the government will replace the Wear and Tear Allowance with a new relief that allows all residential landlords to deduct the actual costs of replacing furnishings.
From April 2016 the level of Rent-a-Room relief will be increased from £4,250 to £7,500
From 1 April 2015 the Standard Rate is 20%, the VAT Fraction is 1/6 and the
Reduced Rate is 5%.