New mortgage taken out on letting property

New mortgage taken out on letting property

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A client who had been working abroad and letting out her main residence A (which was initially mortgage-free) eventually took out a new interest-only mortgage on it to buy a new property B.  B was let for a year and then on her return to the UK, became her new residence whilst she continued to let A. Is the mortgage interest allowable against letting income on A?

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By TaxationPete
10th Feb 2011 19:57

Yes but only up to the value of the property when 'First Let'. The interest of that value is allowable as a deductible against the rental income. Regards Peter

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