In a change that will impact residential landlords, the amount of income tax relief available on residential property finance costs will be restricted to the basic rate of income tax. This change will mean that landlords will no longer be able to deduct all of their finance costs from their property income. They will instead receive a basic rate reduction from their income tax liability for their finance costs. The restriction in the relief will be phased in over a four year period as follows: in 2017/18, the deduction from property income will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction; in 2018/19, 50% finance costs deduction and 50% given as a basic rate tax reduction; in 2019/20, 25% finance costs deduction and 75% given as a basic rate tax reduction; from 2020/21, all financing costs incurred by a landlord will be given as a basic rate tax reduction. These rules do not apply to residential properties held in companies In addition rules may further restrict the relief which is due where the individual's property income or total income is less than the amount on which basic rate relief is due. The computation is complex so please do get in touch if you would like us to review your position. Internet link: GOV.UK guidance