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?
- CGT history of shares 175 4
- Director Expenses and P11D but no PAYE scheme in place 136 5
- Client Entertainment to get new business or referral as opposed to say thanks 169 3
- CIS Subcontractor Catch Twenty Two Position after 14 years 333 6
- CGT on sale of let property 111 2
- ACCA, ACPA, IFA, ICPA 176 2
- how do i get UTR 138 3
- Input VAT suffered in EU 85 2
- Is there any good reading I can obtain to do self assesment on partnerships? 235 3
- A round of applause please for winner of BITCH OF THE 410 11
- How do you get HMRC to refund overpaid PAYE and NIC 128 1
- Your comments please 314 6
- VAT on Royal Mail Parcel Services 189 9
- CT600 deadline & shortened year end 124 2
- EIS 196 4
- Income Splitting - form 17 and DoT 128 1
- Charity requirements to report ALL I&E in accounts 115 2
- Transfer of Software to sister company 125 1
- So who has completed a 2015 tax return then? 725 14
- Should a non trustee sign Scottish charity accounts? 204 1
- Moving away from CCH software 966
- QROP pension input amounts 450
- write off loan or loan to equity swap or both 395
- HMRC BENCHMARK EXPENSES 381
- fraud 304
- EIS relief on transferring shares to spouse 279
- Sole trade business in UK, but the owner works from EU 243
- Construction CIS LLP Company 229
- EPS and CIS deductions 222
- Out of time or not? 207