Residential Property Tax Relief

Dear HMRC Admin, I see the guidance of working out the tax relief of residential property as below: The reduction is the basic rate value (currently 20%) of the lower of: (1) Finance costs - costs not deducted from rental income in the tax year (this will be a proportion of finance costs for the transitional years) plus any finance costs brought forward (2) Property business profits - the profits of the property business in the tax year (after using any brought forward losses) (3) Adjusted total income - the income (after losses and reliefs, and excluding savings and dividends income) that exceeds your personal allowance Referring to (2) Property business profits, is it total rental profits from ALL rental properties if I have more than one property? Or, is it only the profits from the property that I claim for tax relief? Pls comment. Thanks.

Hi ,
 

Thank you for your question, please see guidance available at  : Property Income Manual    which advises- In most cases all the various types of income from land and property in the UK are treated as parts of the same, single rental business. It does not matter how many properties the taxpayer has, or how many different types of income from land and property. This is clear from section 264(a) (UK property businesses) and section 265(a) (overseas property businesses) . This means that normally all the rental business receipts and expenditure can be amalgamated and, hence, that the expenses on one property can be deducted from the receipts of another . However, if a landlord has income from property in the UK and income from property outside the UK, the landlord is treated as having two business: a UK property business and an overseas property business – legislation does not amalgamate them . Thank you .