Budget Focus – Calling all landlords
Despite all the opinion polls pointing to another coalition government, the Conservative Party achieved a parliamentary majority in May’s general election.This has allowed Chancellor George Osborne the opportunity to enact the fiscal measures set out in his March Budget and reiterated in the Conservatives’ election manifesto.
This bulletin sets out the main changes for residential landlords.
Residential landlords – reform of the wear and tear allowance
The wear and tear allowance will be replaced from April 2016 with a new relief that allows all residential landlords to deduct the actual costs of replacing furnishings. Capital allowances will continue to apply for landlords of furnished holiday lets.
Residential landlords – restricting finance cost relief
The relief on finance costs (e.g. interest) that individual landlords of residential property can receive will be limited to the basic rate of tax. The restriction will be phased in over four years, starting from April 2016.
From 6 April 2016 the level of rent-a-room relief will be increased from £4,250 to £7,500 a year.