Not taken off the rent
Since April 2020 a residential landlord cannot deduct mortgage interest and other finance costs from their rental profit. Instead they get a reduction in their tax.
Free landlord tax calculator
How much tax will you pay on your rent?
Enter your rent, your costs and your mortgage interest, and see the Income Tax on your letting - with mortgage interest given as the 20% tax reduction HMRC allows, not taken off your profit. With every step of the working. No email, no sign-up.
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Mortgage interest
A 20% reduction, not a cost.
20% of the lowest of three
The reduction is 20% of the lowest of: your finance costs (with any brought forward), your property profits, and your income above the personal allowance.
What is left carries forward
Finance costs you could not use this year carry forward to the next. A company that lets property is not restricted in the same way.
HMRC's worked examples: Tax relief for residential landlords: how it's worked out. Do you need to send quarterly updates? More for landlords.
What Stoneledger does
Every property, and the tax on all of them.
- What each property earns and costs, and the yield on it.
- Mortgage interest the way HMRC treats it, with the reduction and what carries forward worked out for you.
- Quarterly updates in HMRC's property boxes, if Making Tax Digital applies to you.
Your letting, worked out the way HMRC works it out.
Rent, costs and mortgage interest, property by property, with the tax beside them all year.