Property

Question 1

How much is the tax relief on a buy to let mortgage?

Answer 1

Tax relief on mortgage interest is limited to basic rate tax - 20%

Question 2

How is tax relief on mortgage awarded?

Answer 2

As a tax reducer

Question 3

What is a REIT?

Answer 3

Real Estate Investment Trust

Question 4

There are two types of dividend payment from a REIT, what are they?

Answer 4

Property Income Distribution (PID)

Normal Non PID dividends

Question 5

Income tax treatment of PID (income from REIT)?

Answer 5

Deemed as other income so non-savings income

PID payments are paid net of basic rate tax so should be grossed up for income tax calculation

Question 6

Income tax treatment on non PID dividend (income from REIT)

Answer 6

Payment is received gross.

Entered in dividend column of Income tax calculation