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?
- Capital Gains Relief 36 1
- Companies House praise 188 1
- Tax Penalty overreaction 1,972 14
- Advice on letting a client go ? 577 11
- client can't/won't pay 1,515 27
- Loss carry back in Taxfiler 29 2
- Most cr*p bank account ever? 103 1
- calculate mortgage interest 301 2
- Grammar, spelling and silly questions 699 26
- Directors NIC's 138 5
- VAT field when booking bills for organisations on VAT FRS 57 1
- Entrepreneurs relief 138 2
- Declaration of interest 182 7
- Do we have to register for VAT? 404 8
- New client forgot to take stock count at the year end 239 6
- A Director of a Ltd Company let a general Manager run the company, and if anything goes wrong the general manager is responsible? 88 1
- White van man 832 27
- Close Ltd and be taxed as a sole trader 143 5
- Company Van taxable benefit 147 4
- Reclaiming VAT on unpaid invoices 104 3
- Form MR01 (Particulars of a charge) - does this need to be filed if you remortgage with the same lender? 872
- Underpaid VAT assessment and relation to SATR 568
- Did you realise Google will not patch android exploit ... 533
- Latest phishing scam 463
- Entrepreneurs' relief 412
- Cashback for opening business bank acct = trading income? 335
- Corporate LLP with 30 June Year end - How to record on SA800? 317
- Auto Enrolment Questions Answered 239
- Penalties- On Tax Returns (New Regime) 219
- Loan benefit after person ceases as director/employee 162