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Mortgage interest on rental property

Clients income is below personal allowance - can I elect to carry mtg interest forward?

Didn't find your answer?

Hello hivemind - hoping for some help please

My client 'Anon' has received very little income during the year - circa £3k, including a rental income profit of approx £2.4k

Their mortgage interest costs are approx £1.6k for the year.

Am I able to carry the mortgage interest costs forward in full, as their income is well below the personal allowance, so will not benefit from a tax deduction?

I've tried looking on the gov. website but it doesn't clarify anything for me.

Replies (11)

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RLI
By lionofludesch
11th Jan 2022 12:54

Not only are you able to, you must.

Thanks (5)
Replying to lionofludesch:
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By Paul Crowley
11th Jan 2022 14:05

+1
The software will do it, carry forward Finance costs

Thanks (2)
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By David Ex
11th Jan 2022 12:58

The legislation is referred to here:

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2058

Not sure if it answers your question.

EDIT: What does the client live off - and how did they get a mortgage?!

Thanks (0)
Replying to David Ex:
RLI
By lionofludesch
11th Jan 2022 13:11

David Ex wrote:

EDIT: What does the client live off - and how did they get a mortgage?!

Does this affect the allowability of interest ?

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Replying to lionofludesch:
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By David Ex
11th Jan 2022 14:01

lionofludesch wrote:

Does this affect the allowability of interest ?

I'm an accountant with an inquiring mind. You don't have to spend too much time reading Q&As on here to know that a bit of digging sometimes brings out pertinent facts not in the original question. That's especially true, for some reason, with property lettings where we've seen all manner of "interesting" proposed tax treatments. If the OP doesn't wish to respond, that's her choice.

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Replying to David Ex:
RLI
By lionofludesch
11th Jan 2022 14:08

Ach - I'm sure the OP has considered all that.

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RLI
By lionofludesch
11th Jan 2022 13:51

Look at example 4 in this HMRC blurb

https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlo...

Gleaned from Google by typing "mortgage interest relief residential rental" into the search box.

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By Hugo Fair
11th Jan 2022 16:29

And OP is 'Anonymous' ... why? Can't see anything sensitive in post ... unless it's the figures (in which case would have been more appropriate simply to change those to suitable 'example values' as most people do)?

Thanks (1)
Replying to Hugo Fair:
RLI
By lionofludesch
11th Jan 2022 16:31

Quote:

And OP is 'Anonymous' ... why? Can't see anything sensitive in post ...

Embarrassment?

Thanks (2)
Replying to Hugo Fair:
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By David Ex
11th Jan 2022 16:37

Quote:

And OP is 'Anonymous' ... why?

Pretty sure it wasn’t posted as anonymous so baffled why it was changed.

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By SXGuy
11th Jan 2022 17:03

I'm confused. If mortgage interest relief is a tax reducer and presumably there's no tax to pay on such little income, where else would it go but carry forward?

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