Individual landlords will be expected to use a special form of the cash basis from 6 April 2017, where their annual rental income does not exceed £150,000. If you don’t want to use this cash basis for your property business, you will have to opt out by checking a box on your tax return.
All individual landlords (not companies) who let residential property from April 2017 will have restrictions imposed on the amount of interest and finance charges they can deduct each year.
These restrictions will equally apply to landlords using the cash basis. However, cash basis landlords will be subject to an additional restriction. The deduction for interest and finance charges will be proportionally reduced if the total value of the outstanding mortgages connected to the property business exceeds the market value of the let properties at the end of the year.
