Deducting property rental interest

Last updated 3 January 2020 Requires untied v1.04.245 or later

If you rent out property, HMRC let you claim a deduction on the interest on any loan.

What you can claim is not straightforward. The first version of this help article explained the rules and how to apply them, with formulas about how to calculate a deductible percentage and the tax credit percentage, what to do with each, and more information on the changes being phased in over several years.

But we didn't like it. So we scrapped it.

And instead built the rules directly into the untied app. It means that you just have to enter the interest in the right place, and we'll do the rest. 

Before you start, you'll need to have details of the interest you have paid in the year, probably on a statement from your lender. Note that untied does not allow bank transactions to be tagged as property interest payments - we often can't distinguish interest from repayments and the statement is a more reliable source.

This is how to find the right place to enter the information.

1. Navigate to Profile

2. Select Income

3. Choose the Property option (this box may or not be highlighted depending on whether information has already been entered)

4. Select the "More Options" dropdown

5. Enter interest in whole pound amounts (note there are separate boxes for Furnished Holiday Lettings and Residential Property Income). This figure should come from the statement from your lender.

6. Press Save

Whether for Furnished Holiday Lettings, or your Residential Property Income, untied will calculate the appropriate interest deduction or tax allowance and populate the relevant boxes on the tax return submission.

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