Personal landlords with mortgages or loans on residential lets will be aware of the restriction on the amount of tax credit relief that can be claimed on interest paid. Usually, this amount is 20% of the interest paid in any one year. However, there are circumstances where a further restriction (a ‘cap’) may apply. The ‘cap’ is 20% of the lower of the:
– interest claimable in the tax year
– profits of the business for the tax year; and
– the landlord’s adjusted total income (after losses…