Asked by: Stephen McPartland (Conservative - Stevenage)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what estimate he has made of the number of lower rate income tax payers who will potentially be moved into the higher rate as a result of the provisions set out in clause 24 of the Finance Bill 2015.
Answered by David Gauke
It is assumed that the question refers to clause 24 of the Summer 2015 Finance Bill: relief for finance costs related to residential property businesses.
To make the tax system fairer, the Government will restrict the amount of tax relief landlords can claim on property finance costs (such as mortgage interest or interest on loans to buy furnishings) to the basic rate of tax. This will ensure that landlords with the largest incomes no longer receive the most generous tax treatment. To give landlords time to adjust the Government will introduce this change over 4 years starting from April 2017.
The actual number of taxpayers affected will depend on behavioural changes and other economic factors.