The 4 Years of section 24

Section 24 was introduced in April 2017 affecting tax relief for landlords. What this means is that landlords will no longer be able to claim mortgage interest, or any other property finance costs against net rental profit. Instead, rental profit will be taxed on the full rental income, not just the profit by 2021, affecting the pockets of the Uk’s landlords.

Year 1

From April 2017 – For the first 75% of your mortgage interest cost, the higher rate tax relief can still be claimed. The remaining 25% will have a basic rate of tax relief.

Year 2

From April 2018 – The first 50% of your mortgage interest cost, the higher rate tax relief can be claimed. The remaining 50% will have a basic rate of tax relief.

Year 3

From April 2019 – A higher rate tax relief can be applied to 25% of your mortgage interest costs. The remaining 75% will be at the basic rate.

Year 4

By April 2021 – Landlords will only be able to claim tax relief at the basic rate level of 20%.

These tax changes could tip some landlords into a higher rate tax bracket, and there could also be some landlords made to pay tax on properties that do not make a profit. For example a landlord making £10,000 of rental income but paying £10,000 in mortgage interest payments could find themselves paying £2,000 – £2,500 in tax (2020/21), as the tax no longer applies to the profit but the entire rental income.

5 Ways to Make Your House Insurance Cheaper

1- Rebuild value

If something happens to your home, are you sufficiently covered? Always make sure you are fully covered should you need to rebuild your home from scratch.
At the opposite end of the spectrum, make sure that you haven’t set your rebuild value too high, or you could be paying too much for insurance.

2 – Pay in full

If you are able to pay the whole years insurance in one payment, do so, as paying monthly will usually cost you more.

3 – Cashback

Check coupon and cashback sites, as some insurers offer deals on their policies.

4 – Auto renew

Never ever auto renew your insurance if you want to save money. The price is usually always cheaper for new customers while existing customers get a price hike! Shop around or speak to your existing insurer and ask them to lower the price.

5 – Reducing premiums

Fitting a burglar alarm, approved locks, and installing security lighting are just some of the things that can help reduce your insurance costs.

Is your money protected?

British savers are now protected up to £85,000 should their bank collapse, but not many people know it is per licensed institution not by account.

The Financial Services Compensation Scheme which protects savers in the UK, says should the unfortunate happen, compensation should be in around 7 days, £85,000 for a single account and up to £170,000 for joint accounts.

Should you have more than £85,000 in savings then it is important to spread your money across different financial institutions. As different banking names are licensed under one parent company, it is important to know in which banks your savings are completely safe.

The Financial Services Compensation Scheme has an online tool to check how safe is your bank….and your money.