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Where Taxpayers and Advisers Meet

Residential finance costs

Brightonian
Posts: 99
Joined: Wed Aug 06, 2008 3:31 pm

Residential finance costs

Postby Brightonian » Mon Jun 04, 2018 3:28 pm

I am preparing a return for a client whose total taxable income consists of rental income and is below the personal allowance. After deducting 75% of loan interest and normal expenses, I am left with profit of around £1,000. I have excess finance costs (the remaining 25% of loan interest paid in the year) of £700. As far as I can see, the amount taken into account is the lowest of the rental profit (£1,000), the relievable amount (£700) and the adjusted total income that exceeds the personal allowance (Nil). If I am right about this, the £700 interest can be carried forward to the following year and does not have to be used in 2017/18. Is this correct?

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