Loan interest on let property
Client extended mortgage on own residence to raise a deposit on their first let property. A buy to let loan was used for the remaining capital.
Mortgage interest has been claimed on the amount of interest paid on the additional borrowings on their own home that was used for the deposit. HMRC say the deposit mortgage loan on their own property which is not let is not allowable.
The additional borrowings were used wholly and exclusively for the purchase of the let property so shouldn't this be allowable?. The loan interest has been apportioned so nothing has been claimed in respect of the purchase of their main residence.
HMRC is also disallowing the buy to let fees as these are included in the buy to let loan and have been "capitalised and therefore included in the loan relief claimed". The loan relief claimed is only for the interest paid on the loan . I believed incidental costs of arranging business finance is allowed so the cost of these as well as the loan interest should be allowed.
Client has dealt with this themselves up till now so not sure if HMRC's decision is based on how client has put it to them.
Before I reply to HMRC I would like to be sure that the mortgage interest on the deposit is allowable and that the cost of the buy to let mortgage fees can also be claimed. Does anyone agree?
- Tax treatment of gift of expensive watch 48 3
- Renting home garage and outbuildings to Business 199 4
- Rock 199 12
- Accounting Web - What is happening? 468 17
- Moneysoft - technical query 417 11
- Giving investment company to spouse 64 2
- Recommendations for in house accounts prep software? 95 2
- Late RTI submissions on change of accountants 247 5
- Xero Pain Points 329 14
- Tainted donation by company 179 2
- 2014/15 Tax calculation spread sheet 670 8
- HMRC incompetency 214 1
- Copies of every transaction can't be OK!! 634 10
- HMRC site down ? 271 5
- Tax Codes and VAT 223 3
- The importance of Grammar 1,013 25
- VAT REGISTATIONS 237 5
- Why does Aweb always take the nuclear option … 2,914 65
- System selection 188 2
- is photo id necessary to set up a direct debit? 508 21
- Any knowledge of salesorder.com 361
- Chart of account segments; Balance sheet vs P&L 303
- HMRC RTI Filing Problem 291
- Goodwill and the Summer 2015 Budget 283
- Could and would anyone here carry out a hot file review of some non statutory audit work please? 279
- Electric Car 234
- S222 Charge 206
- What is the best acounting software for online international retail business? 201
- Foreign Tax on Pensions 195
- Company Structure 181