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mortgage interest/finance cost rate restricted relief

Article ID
ias-12844
Article Name
mortgage interest/finance cost rate restricted relief
Created Date
27th June 2018
Product
IRIS Personal Tax
Problem
What is mortgage interest/finance cost rate restricted relief and when will it appear on the computation?
Resolution
This was a legislation that was brought in from 2018, whereby 25% of the expense type 16 or 17 for a property will be taxed at the basic rate of 20%. Please see the link below: https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords The calculation of the Mortgage interest/finance costs is mainly based on the reasons below: 1. There needs to be enough profit for the property. 2. There needs to be enough taxable non-savings income. 3. The calculation will also be restricted if there is income tax relief If it does not show that year, then it will be carried forward to the next year. You can find a detailed report under Reports | Residential Finance Costs Computation.

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