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Changes in the treatment of income from buy-to-let properties.
KEY POINTS
- After 6 April 2017 rental profits must be computed without including interest payments.
- A new tax reduction relief will apply under ITTOIA 2005 s 272A.
- Complications arise if the tax reduction relief cannot be used in the relevant year.
- Companies are not affected by the new rules.
It seems the government does not like the boom in buy-to-let. In particular the chancellor looks askance at individuals taking advantage of low interest rates to hoover up properties that he would rather see acquired by owner-occupiers. The assertion that it is “not fair” that landlords obtain tax relief for interest but owner-occupiers do not bears not a moment’s serious consideration.
Nonetheless clause 24 of the Finance Bill 2015/16 limits tax...
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