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Why is the property costs relief showing as Zero

I have an amount in box 41.1 self assessment which shows through on the SA but the relief is Zero

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 I do need help with this one.  I have a property partnership which has made a profit I have entered the allowable 50% on the form and the remaining 50% in box 1.4 and box 26.  I then transfered half of that amount (as there are 2 partners) to box 41.1  On each of the partners Self Assessments.  when I did the tax calculation it show as minus relief for finance costs £4906 reduced to maximum allowance 0.00 x 20% = 0.00.  I phoned the revenue and was put through to a technican who said it was correct and you only get the 20% if the property made a loss.  My client said that this is wrong and I must say I have not seen that in any instructions.  I am using software as I could not even find the right box on the HMRC software and all they could say was it was box 41.1 and they can see the box numbers so I should be able to.  Any help would be greatly appreciated       

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By Tim Vane
17th Oct 2019 01:57

Well yes it is perfectly possible that the relief available is zero. Given the amount of useful information in your post I'd probably have more chance of guessing the colour of your living room carpet than making a judgement on what the figures in your computation should be. I am sure that there are a number of perfectly competent accountants in your local area who would be happy to help you with some planning for a reasonable fee.

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By klerg000
17th Oct 2019 10:31

I am a perfectly competent accountant who has a legitimate question. If you are unable to answer with the information then fine ask for more information or don't answer at all. There is no need to be rude an obnoxious.
I though this was a place for professional who acted professional not a place to show what a bully you are

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By Tim Vane
17th Oct 2019 10:39

klerg000 wrote:

I am a perfectly competent accountant

Are you? If you don't know the legislation and cannot understand how the restriction of the relief might work or be able to find out then I am afraid that "perfectly competent" may be stretching it.

klerg000 wrote:

I though this was a place for professional who acted professional not a place to show what a bully you are

I advised you to find an accountant. This was sensible advice given that your post did not give any indication that you either knew your way around a tax return or understood the rules around restricting the relief. It was certainly not clear that you were a professional. I'm not sure how you take that as bullying but feel free to ignore my advice and carry on bashing out tax returns yourself.

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By klerg000
17th Oct 2019 10:54

Competency is recognising what you don't know and asking for help to get it right

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By Wanderer
17th Oct 2019 02:35

First you say you transferred the figures to 41.1 then you say you couldn't find it?
Anyway are you using the partnership (short) pages (SA104S) of the personal returns? You should be using the Partnership (full) (SA104F) pages.
Edit: ignore the above, just re-read your post.

If you've done that correctly then as Tim says "it is perfectly possible that the relief available is zero".

Oh and HMRC 'technicians' really aren't the best resource to turn to regarding tax advice.

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By klerg000
17th Oct 2019 10:42

Thank you wanderer for your answer. I am using the full property pages of the tax return. On the software I am using I have a box 41.1 of which I have entered the amount of un-claimable finance charges. which then shows through on the calculation but the allowance is zero.
I could not find on the HMRC online form where I should put this amount which is why I changed to using the F tax form.
Yes I agree that HMRC technicians are not the best people to ask which is why I did not take there answer as definatly true and though I would ask people like yourself.
I have read all the information on this but can't get a definite answer so any help or put me in the right direction of any reading material I would be very grateful

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By Wanderer
17th Oct 2019 10:53

We'd need some figures to work it through. Possibly:-
Losses on other properties?
No overall tax?
Bought forward losses?

It's all guesswork at the moment however remember that the the deduction is restricted in some circumstances, such as the following ( text courtesy of rossmartin):

When property profits are less than finance costs, the deduction is limited to 20% of the property profits. The reduction does not reduce tax payable on other sources of income.

When there are property losses brought forward these must be set against property profits and could reduce the taxable profit to less than the finance costs. Here the deduction is limited to 20% of the taxable profits.

When total income (excluding any savings or dividend income which are taxed as top-slices) is low, so that some or all of the rental profits fall within the personal allowance, the deduction is restricted to 20% of the profits that are actually taxed.

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By klerg000
17th Oct 2019 11:24

Thank you Wanderer. your answer has been very help full.

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