Deductibility of interest on loan payments to buy premises with business/private usage.
A sole trader wishes to buy a pub which will also be his main residence upstairs. He is unable to finance the loan himself but instead his father takes out a loan himself to buy the premises and becomes a small profit sharing partner within the business. Each month the son then transfers sufficient funds into his father's account to support the total loan payment being made to the lender.
The question is whether the son can claim tax relief on the interest part of the loan repayment against his profits?-can we apportion based on business/private usage? (Incidentally, the property title deeds will be in the son's name)
Thanks for any help.
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