Differences between the Land and Property Summary and the Tax Calculation Even though the Land and Property Summary shows that the amount is available for use, it's not possible to calculate any restriction until the tax calculation is generated, and HMRC's tax calculation is applied. Only at this point the software is able to determine if the relief needs to be restricted by (a), (b) or (c) below. The Tax Calculation will show the details of any restriction and (in some circumstances) you may need to amend the figures entered on the Land and Property Summary to ensure the correct amounts are carried forward. Example: Here the land and property summary shows £500 against Amount used this year 
Land and property summary Here the land and property summary shows £500 against Amount used this year Tax calculation On the tax calculation, the property finance costs breakdown shows as zero being relieved and the £500 being carried forward. In this example the relief is restricted to the Adjusted total income of zero (shown as (c) in the table below)  Why does this get carried forward? One reason for this may be because the tax reduction can't be used to create or increase a tax refund and part of the calculation uses your adjusted total income (see (c) below). The reduction is the basic rate value (20%) of the lower of: | | | Description | | (a) | Finance costs | Costs not deducted from rental income in the tax year (this will be a proportion of finance costs for the transitional years) plus any finance costs brought forward | | (b) | Property business profits | Profits of the property business (or the individual's share of profits if it's a partnership) in the tax year (after using any brought forward losses) | | (c) | Adjusted total income | Income (after losses and reliefs, and excluding savings and dividends income) that exceeds your personal allowance | Source: .GOV.UK website If the amount on which relief is available is less than the total in (a) above (e.g. because it is limited by (b) and/or (c) above), the unrelieved amount is carried forward and included in (a) in the following tax year. The Property finance costs section on the tax calculation (usually page 2 onwards) will show which of the three reasons is the cause of the relief carrying forward (e.g. it's restricted by a nil adjusted total income). Example: Ted has £8,000 profit from his UK property and £55,000 from dividends with no other source of income. The property finance costs appendix shows: 
Ted has £8,000 profit from his UK property and £55,000 from dividends with no other source of income. The property finance costs appendix shows: | Property finance costs | | | | £ | £ | £ | £ | | Net income | | | | 63,000 | | | Total dividend income | | | | (55,000) | | | Total allowances | | | | (11,850) | | | Adjusted total income | | | | | 0 | | Total allowable finance costs | | | | | 2000 | | Relievable amount | | | | | 0 | | | | | Total costs | Adjusted profit | Allowable costs | Relieved amount | Carry forward | | UK property | 2,2000 | 8,000 | 2,000 | 0 | 2,000 | | | 2,000 | | 2,000 | 0 | 2,000 | In this example, although there is a substantial amount of dividend income, this is excluded from the calculation when working out the adjusted total income (c) which is the limiting factor in this example as his adjusted total income is nil. Please see our main article for more information on restricted finance costs for landlords [BCB:19:UK - Sales message :ECB] |