Deducting property rental interest
f you rent out a property, HMRC let you claim a deduction on the interest on any loan. Here's how to do it in the untied app and untied Pro in the browser (scroll down). Note that interest needs to be entered separately, and not tagged as a transaction.
You cannot claim a deduction for mortgage repayments - only the interest.
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.
In the untied mobile app
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.
1. Navigate to Tax Forms > UK Property (make sure you're in the right tax year!)
2. If you've already tagged property transactions, then it should already be checked to include this section. If not, mark it and indicate how many properties you have. Then tick to view more options.
3. Enter the interest paid in the relevant tax year. Make sure you put it in the right section of Property Income or Furnished Holiday Lettings income. Don't forget to click save!
(Note that this order may not reflect the order in HMRC forms - the order we have it is the one that makes most sense for untied users)
A bit of background for those interested in how we approach things
What you can claim is not straightforward. The first version of untied was accompanied by a complex help article that 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.