Chancellor George Osborne announced in the Summer Budget that he will restrict the relief on finance costs, including mortgage interest payments, available to individual landlords of residential property to the basic rate of tax. The restriction will be phased in over a 4 year period, starting from April 2017.
The Government will also replace the existing wear and tear allowance with a new relief that will allow all residential landlords to deduct the actual cost of replacing furnishings from April 2016. Capital allowances will continue to apply to landlords of furnished holiday lets. A technical consultation will be published on the new relief before the summer.
For more information on Landlord and Tenant Law contact Robert Cherry.