The amount of interest eligible for tax relief for Residential Buy-to-Let Investors at the higher and additional 40% and 45% tax rates are:
- 75% of the interest paid in 2017/18
- 50% of the interest paid in 2018/19
- 25% of the interest paid in 2019/20
Any remaining interest will be eligible only for income tax relief at the basic rate (20%). From 6 April 2020, a higher or additional rate taxpayer will only be able to claim tax relief for any Residential Buy-to-Let interest at the basic rate so a taxpayer’s total income will no longer include a deduction for the restricted interest.
Chris Wallace Managing Director Visionary Accountants, St Albans said:
‘If this is likely to affect you we recommend you consider how much income you will earn in this tax year and read Visionary Accountants Practice Manager James Murray's article: It’s not too late to start tax planning for the year-end, as you may lose your rights to certain benefits if your taxable income goes above certain thresholds.’
Non- Residents selling residential property
If you are a non-resident and are selling UK residential property you are liable to UK Capital Gains Tax on the proportion of the overall gain that relates to the period after 5 April 2015. You must report the sale to HMRC within 30 days of conveyance and include a value of the capital gain or loss that arises. Even if you don’t owe any tax you need to submit a return and if you send in your return late you will have to pay a penalty.
Chris Wallace Managing Director Visionary Accountants, St Albans continued:
‘Most non-residents will have a choice in terms of how to calculate this. They could re-base their property value to the value at 5/4/15 and work out the gain up until their disposal, or consider the straight-line apportionment of the whole gain they have made during their ownership.’