December 7th, 2018
Changes to the income tax treatment of buy-to-let may have been announced some time ago, but the financial impact of these changes are only just starting to hit landlords in the pocket.
With tax returns for 2017-2018 now being submitted ahead of the end of January deadline, these will be the first to include the staggered removal of mortgage interest tax relief on rental income. Consequently, many of those returns will result in a larger than expected bill for some landlords.
Individual residential landlords with mortgages on their properties will be affected if they are higher or additional rate taxpayers or pushed into higher or additional rates by the new mortgage interest relief restriction rules. The first year that the rules came into effect was for the year ending 5th April 2018. However, as the due date of tax for said year is 31st January 2019, people will be feeling the pinch for the first time soon.