New rules cap relief on income tax
People using relief as a way of reducing their overall tax bill on income might want to take note, because capping relief is now in force for income tax.
Whereas in the past relief such as losses and loan on interest payments were unlimited, they are now restricted each year to £50,000 or 25 per cent of the total income, whichever is the greater.
The primary reliefs affected are trade and property loss reliefs that can be relieved against general income and qualifying loan interest relief.
Where losses and loan interest occur, we need to look at the most beneficial way to utilise the reliefs available.
Paul Gosling is head of tax at Banks chartered accountants in Swindon. For advice on tax relief and the new capping rules, contact Paul at firstname.lastname@example.org