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Posted Sun, 23 Jan 2022 17:28:35 GMT by hchesh ty
I rent out my flat that I have a mortgage on - should i be putting the total interest i paid on the mortgage for the 2020/21 tax year under "Residential property finance costs" or is this not necessary? I'm unclear if the interest is something I can claim relief on anymore.
Posted Mon, 24 Jan 2022 12:23:36 GMT by HMRC Admin 17

Hi,
 
Thank you for your question.

You should put the ineterest paid on your mortgage under "Residentail finace costs".


Thank you.

 
Posted Mon, 24 Jan 2022 20:02:58 GMT by Shaz58
How is the tax relief for this calculated please as the Residential finance cost box is after the page that shows your 'taxable profit for the year'.
Posted Tue, 25 Jan 2022 08:58:56 GMT by HMRC Admin 17

Hi,
 
This will be taken as a basic rate tax deduction from your tax liability for the property.

You calculation will work out the tax based on your net profit.

If there is any tax due it will then use 20% of the amount in the finance costs box and reduce the tax liability by this amount.

There will be separate line towards the end of the calculation to show this.

Thank you.
Posted Mon, 09 May 2022 16:12:47 GMT by suzy king
Is this also the case if you have claimed the property allowance? Or only if you are claiming the allowable expenses? Thank you
Posted Tue, 17 May 2022 08:43:46 GMT by HMRC Admin 10
Hi suzy king
Thank you for your question.
Although I have not seen your original question if you are referring to claiming tax relief in respect of mortgage interest payments on a rental property then I would advise you that can claim this whether or not you have claimed the property allowance or allowable expenses ( IE. If your allowable expenses are over £1000) .
Since the 2020-21 income tax year the tax relief on mortgage payments (Interest only element and not the capital element) on a rental property is no longer given as an expense but your Income Tax liability will be reduced by a basic rate 'tax reduction'.
Regards. 
Posted Tue, 17 May 2022 10:18:28 GMT by Bella Boo
I thought in order to claim property allowance, you can't claim any other expenses including mortgage interest? This page on www.gov.uk seems to agree with me. It is still an expense, just not one that is deductible for residential lettings when calculating profits and instead is relieved when calculating tax liability. https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#cannot Also, I believe the same poster (@suzy king) has also been advised they can claim both the rent a room relief AND property allowance for the same property for the same tax year. One of the conditions of rent a room relief is they can't have any income from a trade, letting or agreement, other than rent a room receipts. So if they have receipts from the same property for a tenant, FHL etc then they cannot claim rent a room relief.

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