As a higher-rate taxpayer, what's the actual impact of Section 24 mortgage interest relief changes on my net rental income and how can I legally minimise it?
Quick Answer
Section 24 prevents individual landlords from deducting mortgage interest, replacing it with a 20% tax credit. This disproportionately impacts higher-rate taxpayers, increasing their net tax liability on rental income. Incorporating a limited company is the most common strategy to mitigate this.
About This Topic
Higher-rate taxpayer landlords face increased tax liability due to Section 24, replacing mortgage interest deduction with a 20% credit. Incorporate a limited company to minimise this impact, as companies deduct 100% of interest, saving thousands annually.
This question is part of our Tax & Accounting category, providing expert guidance on UK property investment.
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