Guides4 min read
How Section 24 changes the tax on rental finance costs
Individual UK landlords cannot deduct residential mortgage interest in full. A basic-rate tax credit replaces that deduction.
For individual landlords, finance costs are not a full deduction against rental profit.
You still report the interest. Relief is a 20% tax credit on those finance costs, not a reduction of taxable profit at your marginal rate.
Higher-rate taxpayers feel this most: interest that once offset income at 40% now only credits at 20%.
Limited companies sit outside this restriction. Treat a Section 24 estimate as a personal-landlord figure, not an SPV figure.
Carry-forward and the statutory three-way test are more detailed than a marketing estimate. Use the calculator as a directional check, then confirm with your accountant.