buy to let tax how much

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mrsfonin
mrsfonin Posts: 3 Newbie
edited 24 November 2016 at 2:59PM in Savings & investments
Hello. Can you confirm if this calculation is correct for tax on buy-to-let as currently proposed after the 4 year tapering of mortgage interest relief to 20% in 2020.

Rent £28,000
Allowable expenses £5,000
Taxable Profit £28,000-£5,000 = £23,000
Mortgage interest £15,000
Mortgage interest relief 20% on £15,000 = £3,000.
Taxable profit = £23,000 - £3,000 = £20,000.

Thank you.

Comments

  • whatarethescores
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    That looks correct to me assuming no carried forward losses (if there are the interaction with the finance expense relief becomes a bit more complex).
  • Pincher
    Pincher Posts: 6,552 Forumite
    Combo Breaker First Post
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    It looks alright.

    Don't forget the 10% dilapidation (£3,100 on £31k) is no longer claimable for 2016/17. You can only claim actual expenses now. :(
  • mrsfonin
    mrsfonin Posts: 3 Newbie
    edited 24 November 2016 at 2:57PM
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    Thanks for both replies.
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