Section 24 typically refers to a specific provision in the tax laws of the United Kingdom. Section 24 of the UK Finance Act 2015, also known as the “Buy-to-Let Mortgage Interest Relief Restriction,” introduces changes to the tax treatment of mortgage interest and finance costs for landlords.
Prior to the implementation of Section 24, landlords were able to deduct the full amount of mortgage interest and finance costs when calculating their rental income for tax purposes. However, under the new rules, which are being phased in from 2017 to 2020, the ability to deduct these costs is gradually being restricted.
The key impact of Section 24 is that landlords will no longer be able to deduct mortgage interest and finance costs as an expense against their rental income. Instead, a basic rate tax credit is applied to the allowable expenses. This means that the tax relief on mortgage interest is gradually reduced, potentially resulting in higher tax liabilities for some landlords.
It’s important to note that these tax changes primarily affect individual landlords who own properties in their own name or as a partnership. The rules may not apply in the same way to companies or properties held in a different legal structure. As tax regulations can be complex and subject to change, it’s advisable to consult with a qualified tax professional or accountant for personalized advice regarding Section 24 and its implications for your specific situation.
Talk to Power Team®
Want this applied to your own numbers?
We work with landlords, investors and owner-managed businesses across the UK. Tell us where you are and we'll come back within one working day. A first conversation is free and genuinely useful.
Or book a call directly
