How allowable is interest on a loan taken out after property purchase?
I have a client who has taken out a substantial loan. He rents out property but the loan is not secured on any particular property. There are no other loans.
What are the conditions to “link” the loan to the rented property?
I’m aware of the possibility of withdrawing property capital a/c by way of a loan and getting relief for the interest on the loan up to the value of the capital a/c.
Can any loan be linked and deemed as a loan for the purchase of the property? Given that the loan is taken out several years after the initial purchase, there is no actual flow of funds from the loan to the purchase of the property. It all seems rather nebulous, so I’m struggling to see how one can say “this loan is for the withdrawal of the capital from this rented property”. Or to put it another way, what would prevent a loan being linked?
By the way, the initial purchase was not funded by any loans.
- IT advisory questions? 374 11
- Homing sandwiches 758 18
- Direct debit entry query 115 4
- Moneysoft and People's Pension 726 12
- Can you help me spot errors? 151 2
- Do most of you still use MS Office? 1,112 18
- Client needs a UK tax residency certificate for Spanish tax authorities 43 1
- Acounting Courses 87 1
- Mileage allowance payment via payroll 105 2
- signature required 802 30
- Any constructive answers? Employment Support Allowance 316 6
- Stock Control System for Ecommerce Website 263 2
- Dividend Waiver and Settlement Legislation 90 1
- When to leave the VAT FRS 139 6
- Corporation Tax return - more than one trade 216 2
- Use of home query 392 7
- Suggested tips to become a better accountant? 306 7
- EU eservices VAT change imminent 539 11
- CIS software 197 5
- Small bus. accounting software with departments 160 4
- Auto enrolment excuses 1,288
- Feedback on accounts production software for IFRS 845
- Add T&Cs to Sales Order in Sage 536
- Digita Hosted Software 350
- Credit where credit's due....... 327
- Buying goods in US and selling them to company in US 251
- Flat rate VAT- other income calculation 213
- TheTax Donut 210
- Double taxation relief - same income, different individual 177
- Semi retired FCA or equivalent 156