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Summer Budget 2015: A shake up for property

Summer Budget 2015: A shake up for property

One of the big changes announced in Summer Budget 2015 is a change to how property rental income is taxed.

The amount of income tax relief landlords can get on residential property borrowing (such as mortgage interest) will be restricted to the basic rate of tax. The measure will be phased in over 4 years from April 2017 with the effect that landlords with higher incomes no longer receive the most generous tax treatment. Furnished holiday lettings are excluded from this reform.

The phasing in will work as follows:

• in 2017–18, 25% of the interest cost will attract tax relief at 20%, 75% will attract tax relief at the individuals marginal tax rate if higher;

• in 2018–19, 50% of the interest cost will attract tax relief at 20%, and 50% as above;

• in 2019–20, 25% of the interest cost will attract tax relief at 20%, and 75% as above;

• from 2020–21, all of the interest cost will attract tax relief at 20%.

If you have any questions or would like to discuss any further please contact Lesley Sutton on 01484 550 037 or email tax@revellward.co.uk.

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