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Help on Tax Credit (Mortgage Interest for Property Income) Question!

Forums › ACCA Forums › ACCA TX Taxation Forums › Help on Tax Credit (Mortgage Interest for Property Income) Question!

  • This topic has 0 replies, 1 voice, and was last updated 1 year ago by ictiancris.
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  • August 30, 2021 at 5:02 pm #633553
    ictiancris
    Member
    • Topics: 10
    • Replies: 3
    • ☆

    Hi! I was attempting an exam and got wrong in this question, and I feel like I should be correct on this though…

    ——-
    Here is the question:

    Vicky owns and rents out several properties. The following information is available for the tax year 2020/21.

    The Blue House (furnished)

    Annual rent £12,000

    Allowable costs £4,000

    Mortgage payment £2,500 (of which £1,000 was interest)

    Replacement of a dining table and chairs. The new table has six chairs and cost £650. The old table had four chairs and a similar table and chairs would now cost £500.

    The property was let for the whole of 2020/21.

    The Green House

    Annual rent £15,000

    Allowable costs for the let period £3,625

    Redecoration costs £3,500

    Mortgage interest £1,500

    The property was let from 1 November 2020. The rent was payable monthly in advance on the first day of each month.

    The Red House

    This house is fully furnished, was available for let all year and was let for 48 weeks in 2020/21.

    Weekly rental £850

    Allowable costs in the rental period £13,120

    Mortgage interest £800

    ——-

    My Answer of Tax Credit is 660 ((800+1000+1500) @ 20%), and somehow its wrong? Can someone help me please? I’m confused!

    The Correct Answer is: £500

    (Speculation: Is it because of the furnished holiday letting, hence the 800 is not included?)

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