Property loan interest relief

Property loan interest relief

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Regarding the withdrawal of capital from a rental business - I am comfortable that you can claim loan interest relief against letting income up to the value of the property when first let. My question is:- does the allowability of any interest depend upon whether or not the mortgage is secured on the let property or not?

For example, suppose an individual first lets a property and its value is £150,000. An unsecured loan of £100,000 is taken some years later for puposes other than for the rental business - can relief be taken for the interest paid on that loan against the rental income on the basis that capital has been withdrawn from the lettings business?

It seems to me that if the loan is not secured on the property, strictly speaking, no capital has been withdrawn and that therefore no interest relief can be claimed. Is anybody able to confirm this?

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