Residential tax relief - remortgage fees and 20% of finance fees?

I am filling out my tax return for the first time (residential income for Buy to Let Property started June 2022), and I would like to check two points please? 1. I remortgaged my house from a normal mortgage to a 'buy to let' mortgage in May 2022, in order to rent it out. I had to pay a £995 product fee as part of this (plus a £30 CHAPs fee). Am I able to put this down as 'finance costs'?, and if so, which box should I add it to? 2. I have read that there is a tax relief of 20% of the mortgage income for the property. I paid £3,312 in interest in total on the buy to let mortgage in 22-23 tax year, so I put this figure in the 'residential finance costs' box. Is this correct? However, it did not provide any relief in the overall calculation - I was expecting that 20% of this figure would not be taxable? Many thanks in advance for your help

Hi,

The costs of obtaining a loan to buy your residential property and any interest on the loan, can be used to calculate a reduction the the Income Tax arising.

To qualify for relief, the incidental costs must be wholly and exclusively incurred for the purpose of obtaining the finance, or providing security for it, or of repaying it.

An entry should be made under 'residential finance costs' together with the interest paid. Relief is due at a flat rate of 20%. However, should the profits be low, the relief is restricted to the lower of the profits x 20% or the finance costs x 20%.

Any unused finance costs can be carried forward to the following year.

Thank you.

Thank you for your reply. I have entered the amounts in the 'residential finance costs' box, but asked the question as there were no adjustments made on the 'Summary' page. Do you know why my finance costs have not allowed an adjustment in the amount of tax I will pay? Thank you

Hi MaryH,
.As we are not able to see your Self Assessment tax return, We would suggest you contact HMRC on 0300-200-3310 to seek further clarification.
Thank you.