Buy-to-let tax - loan interest

One of the largest expenses incurred by a landlord running a letting business is the loan interest paid on any buy-to-let loan secured for their property rental business.

However, it is not just the loan interest paid on any buy-to-let mortgage. Other loans that were used in connection with their buy-to-let business can also be included as an allowable expense when a landlord calculates their rental profit. Landlords should remember that it is only the interest on the loan that can be included; any sum used in the repayment of capital needs to be excluded.

The Property Manager 2 FREE letting software available on www.propertyhawk.co.uk allows landlords to calculate their rental profits and tax liability. Landlords should add in the loan interest for each buy-to-let loan. Where they have a loan which is not secured against a buy-to-let property they can create a property called 'general'. They then can add in the loan interest paid against this to record a complete record of all the loan interest paid.