Part 4: Income tax, corporation tax and capital gains tax Section 24: Relief for finance costs related to residential property businesses Background note
Persons subject to income tax are currently able to deduct interest and other finance costs, such as the fees incurred when obtaining or repaying a loan, from the rental income in arriving at the profits of the property business where the costs are incurred wholly and exclusively for the purposes of the property business.
	Individuals are also able to make a claim to deduct interest on a loan to invest in a partnership when calculating their net income.
	This section restricts those deductions for finance costs relating to let residential properties and instead allows for a deduction from an individual's or, where relevant, trustees' income tax liability.
	The maximum relief that can be obtained is the basic rate value (currently 20%) of the total finance costs on loans referable to let residential properties.
	This section will ensure that landlords with higher incomes no longer receive the most generous tax treatment. To give landlords time to adjust the section introduces this change gradually from the tax year 2017-18 over 4 years.