Under new rules that came into effect from April 2017 the tax relief on mortgage costs for residential landlords was restricted to the basic rate of tax. The finance costs restriction was phased in over a number of years and is now fully in place since 6 April 2020. This means that all finance costs, such as mortgage interest on rented properties, are disallowed as expenses and any tax relief is restricted to the basic rate of tax (20%) tax reduction.

The definition of finance costs include interest on mortgages, loans – including loans to buy furnishings and overdrafts as well as alternative finance returns, mortgage fees and other costs and discounts, premiums and disguised interest. No relief is available for capital repayments of a mortgage or loan.

These changes have affected many higher rate and additional rate taxpayers and particularly those with highly leveraged properties, i.e., loans form a significant part of property values. The rules also mean that relevant taxpayers are pushed into paying higher tax rates than previously was the case. This could mean losing some or all of their personal allowances as well as restricting the amount of tax relief on money invested in their pension.

The finance cost restrictions apply if you are a UK resident individual that lets residential properties in the UK or overseas, a non-UK resident individual that lets residential properties in the UK or if you are involved with a partnership that lets properties or are a trustee or beneficiary of a trust liable for Income Tax on the property profits.

Interestingly, landlords of furnished holiday lettings are not affected by the restriction on finance costs.

The next time you receive a request, by phone, text, or email, that requires you to take an action or verbally disclose information about yourself or your finances, alarm bells need to ring.

Criminals now use every means at their disposal to obtain details that will enable them, ultimately, to cause you financial harm. For example, they might:

• Pretend they are the tax office and offer you a tax refund or threaten you with legal action if you do not pay tax, you apparently owe.
• Pretend you have inherited from a distant relative and all you need to do is send them certain personal details.
• Call your mobile or landline using automated software and offer you some form of reward, financial penalty, or legal action unless you immediately select a number on your keypad.

With your personal details, name, address, etc., they can pretend they are you and borrow money in your name. With your bank details they can transfer money from your bank account.

Criminals can do this from the comfort of their homes, all they need is a computer. And so, be cautious when responding to any request for personal information or bank details. If in doubt, do not respond. Instead, contact a trusted adviser, call the tax office or your bank using contact details published on official websites.

A new scheme, aptly named Breathing Space, was launched 4 May 2021.

Breathing Space will give those facing financial difficulties space to receive debt advice, or mental health crisis treatment, without pressure from creditors or mounting debts.

Under the scheme, people will be given legal protections from their creditors for 60 days, with most interest and penalty charges frozen, and enforcement action halted. They will also receive professional debt advice to design a plan which helps to get their finances back on track.

And recognising the link between problem debt and mental health issues, these protections will be available for people in mental health crisis treatment – for the full duration of their crisis treatment plus another 30 days.

People across England and Wales who are struggling to repay their debts could be eligible, and the Government expects 700,000 people to benefit in the first year of the scheme.

Most debts will qualify for this new scheme including credit and store cards; personal and payday loans; overdrafts; utility bills, rent and mortgage arrears; and government debts like tax and benefits.
 

One of the measures announced at the Budget was the introduction of a new Mortgage Guarantee Scheme to help home buyers purchase property. The scheme was officially made available from Monday, 19 April 2021. The new scheme is designed for prospective home buyers who only have a small deposit and are therefore unable to obtain mortgage finance. Under the scheme, lenders will be able to offer new 95% mortgage products.

The scheme is open to first time buyers and home movers across the UK. Home buyers can purchase properties valued at up to £600,000 and both new-build and existing properties are eligible. The scheme will initially run until 31 December 2022. The government has confirmed that the end date for the scheme will be reviewed and may be extended.

The government will provide lenders with the option to purchase a guarantee on the top- slice of the mortgage (over 80%). Lenders will also take a 5% share of net losses above this 80% threshold. This will help to ensure that lenders are not incentivised to originate poor quality loans. Lenders will also need to pay the government a commercial fee for each mortgage in the scheme. The mortgage guarantee will be valid for up to seven years after the mortgage is originated.

There will be a cap on the size of the government’s contingent liability under the scheme of £3.9 billion although this is not expected to impinge on delivery of the scheme. The scheme is similar to a previous Help to Buy: Mortgage Guarantee Scheme that closed to new applicants on 31 December 2016.

The scheme is available from lenders on high streets across the country, with Lloyds, Santander, Barclays, HSBC and NatWest already launching mortgages under the scheme and Virgin Money following next month.

Commenting on the launch of the scheme, the Chancellor of the Exchequer, Rishi Sunak said:

'Every new homeowner and home mover supports jobs right across the housing sector but saving for a big enough deposit can be hard, especially for first time buyers.

By giving lenders the option of a government guarantee on 95% mortgages, many more products will become available, boosting the sector, creating new jobs and helping people achieve their dream of owning their own home.'

Many families will be organising UK holidays this year and so passports may be left in draws for 2021.

But when the market for overseas holidays opens up, better check that your passports still meet that important “6 months before they expire” condition if you don’t want to be turned back when you check in for your flight.

If travelling to the EU, you need to have at least 6 months left on an adult or child passport (not including Ireland).

Currently, charges to renew will vary depending on the way you apply. Unsurprisingly, applying online is cheaper than filling out a form.

Current charges are:

How you apply	Online	By paper form
Adult (16 and over) standard 34-page passport	£75.50	£85
Adult (16 and over) 50-page frequent traveller passport	£85.50	£95
Child (under 16) standard 34-page passport	£49	£58.50
Child (under 16) 50-page frequent traveller passport	£59	£68.50
Passport for people born on or before 2 September 1929	Free	Free

You’ll pay a different fee if you apply for a passport from another country.