Mortgage interest paid after purchase of property for letting and before first let – allowable?
Client purchased a property for letting partly funded with a mortgage. The property required extensive renovations before it could be first let and as a result it was nine months after purchase before the letting commenced.
During that nine months, a large amount of mortgage interest was paid. Can I legitimately claim this as a pre-trading expense? The property was bought with the intention to let, but do the interest payments really relate wholly and exclusively to the letting business as for those nine months capital works were being carried out to put my client in a position to be able to let the property.
Any thoughts gratefully received!
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