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.
- Recommendations for tax advice sole practitioner 41 1
- Regaining my qualification 44 1
- Shareholder agreement 123 3
- Tax code for Companies House fees 107 1
- Tax treatment of cashed in American Savings Plan 188 3
- Company Reorganisation 120 3
- G'day IPA-IFA 624 10
- Employee Loan 161 2
- IRIS - Personal Tax - 2013/14 - Page UKP2 447 15
- Statutory residence test - transit days 562 5
- CGT - Is a calculation required now? 102 1
- Wear and tear allowance 443 6
- Accountants' Error 606 12
- Website development costs - tax and accounting treatment 337 6
- Buying accountancy practice 623 10
- Paperless office 1,072 7
- Accountant Error 395 6
- Auto enrolment 142 2
- Subscriptions not on HMRC list of approved bodies 411 5
- Daily Penalties 2012/13 281 3
- Skandia using wrong address 1,442
- Nil Rate Band Trust - index linked debt by way of charge over property 750
- Any views 684
- HMRC Employers Diary 519
- International interest certificate 419
- Stamp Duty on share for share exchange 380
- Sale of business 343
- NOVA 250
- Advertising services? 243
- IRIS Open Books problem 235