Mortgage interest tax relief

loancardpay

Hi, I'm not sure if this is the correct forum for this post. I have a rental property and up until recently I thought I was paying the correct amount of tax on the income from this property. However, the rules have changed in the last few years regarding mortgage interest tax relief. I have completed my self assessment but there is no option to add mortgage interest to it this year. My question is, how do I claim the new tax relief for this now and should I have been doing this for the past 3 years?

Thanks

Pixie5740

loancardpay said:

Hi, I'm not sure if this is the correct forum for this post. I have a rental property and up until recently I thought I was paying the correct amount of tax on the income from this property. However, the rules have changed in the last few years regarding mortgage interest tax relief. I have completed my self assessment but there is no option to add mortgage interest to it this year. My question is, how do I claim the new tax relief for this now and should I have been doing this for the past 3 years?

Thanks

The changes have been getting phased in since 6th April 2017 with the final phase coming into force 6th April 2020 where instead of being able to deduct any of your finance costs you now only receive a basic rate tax deduction.  If you are a basic rate tax payer you shouldn't notice much different but if you are a higher or additional rate tax payer you will be worse off than with the previous system.

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords

I entered my finance costs on my 2020/21 tax return on the UK Property page but instead of being under Property Expenses it came under Calculating Your Taxable Profit or Loss, box number 44.

Crashy_Time

Will they claim a back-payment for the last three years?