Interest relief before property is rented out

Interest relief before property is rented out

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My mind has gone blank. Client has one property which he rents out.

During 2013-2014 he purchased on mortgage a further two properties also on mortgages.

He did not receive rental income from the second and third properties until May 2014.

Can he claim the interest suffered in 2013-2014 or any of the expenses that he paid to bring properties up to scratch.

I am not sure if they were previous rented properties.

Thanks a lot for any comments.

Replies (4)

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By duncanedwards
31st Aug 2014 22:16

There has been
Discussion on here about pre "trading" expenses in a letting business.

Not sure about the interest. My thoughts are that it is allowable, especially given the fact that there is an existing business.

Thanks (1)
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By DMGbus
01st Sep 2014 08:23

Current cost of existing business

A property letting business already exists (so "pre trading" is not in point).

The property portfolio is being expanded funded by borrowing.

The interest on the borrowing is allowable in the tax years when incurred - ie. from date of property acquisition, even if not let out by end of tax year.

It might be different if the property concerned was being lived by by the property business owner prior to letting.

It would be different if the property was to be let at a uncommercial (low) rent.

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By King_Maker
01st Sep 2014 09:39

Mortgage interest should be fine.

As long as the properties were rentable/habitable, the expenditure is likely to be repair/maintenance.

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By garforth
01st Sep 2014 10:28

thanks for help.

Much appreciated.

 

 

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