Relief for finance costs Mortgage interest allowance UK Properties SA105

Relief for finance costs - UK Properties SA105 - Mortgage interest allowance

Relief for finance costs on residential properties is restricted to the basic rate of Income Tax.

Finance costs include mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. No relief is available for capital repayments of a mortgage or loan.

Landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs.

Some information and examples of are provided on this HMRC web page: 

Note: Reference to SA105 box numbers below are from tax year 2017-18 forms. 

Within Andica SA100 Self Assessment Software, in SA105 UK Property section, ensure you have completed all the relevant boxes relating to Residential property finance costs. Refer to HMRC's UK Properties SA105 Notes. Please read information relating to Box 26 and Box 44.

HMRC's SA105 UK Property supplementary form includes fields for you to input 'Loan interest and other financial costs' value.

There are a couple of fields - Box 7 and Box 26 for 'Loan interest and other financial costs' depending on the type of property let.

Box 26 'Loan interest and other financial costs' can be used to report finance costs for non-residential properties and residential properties. The field requires you to input a value as different rules apply for each type of property.

Box 44 'Residential finance costs' not included in box 26 (or box 29)



Disclaimer: Information provided here is given without any obligations and we will not accept any claims or liabilities for any damages as a result of you relying on the information given here, if in doubt you must consult the HMRC Online Services Helpdesk on 0300 200 3600 or a professional tax advisor.



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