Continuing the trend of making changes to the taxation of residential property in recent Budgets the Chancellor today announced three residential property tax changes:
• Limiting the deduction of finance cost in respect of residential property by individual landlords
• Introducing an additional inheritance tax nil-rate band for residential property
• Extending inheritance tax for non-doms to shares in foreign companies which hold UK residential property.
Deduction of finance cost
Individuals are currently entitled to a tax deduction in respect of any interest and other fees paid in respect of loans used to acquire residential property to let to tenants. From 6 April 2017 individual landlords who are higher rate (or additional rate) taxpayers will no longer be entitled to deduct the full amount of such interest and fees.
Between 2017 and 2020 an increasing proportion of the interest and fees will only be deductible at the basic rate of tax (20%) and from April 2020 the … Continue Reading ››
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