See How the Section 24 Tax Changes will Affect Your Income

According to HMRC the Section 24 Tax changes will apply to residential  investors and landlord who are :

  • UK resident individuals who lets residential properties in the UK or overseas
  • non-UK resident individual who lets residential properties in the UK
  • individual who let such properties in partnership
  • trustee or beneficiary of trusts liable for Income Tax on the property profits

Will not be affect those residential landlords who are:

  • UK resident company
  • non-UK resident companies
  • landlord of Furnished Holiday Lettings

High Rate Tax Band for residential landlords

These changes will inevitably push a lot of  residential landlords into Higher Rate Tax Band, even when their income remains static (no increase), over that four-year period to 2021. The example below demonstrates how a landlord with:

An income of £25,000 pa from current employment

A rental income of £3,000 pcm.

Monthly finance costs of £1,500

Monthly running costs of the property of £500

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