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 Fines - HMRC 747 12
- Post AAT? 620 3
- Small amount of untaxed royalties for someone outside SA 48 1
- VAT - Check on clients business 861 36
- Annual to At Least Quarterly 397 18
- Entrepreneurs Relief, and then new company 22 1
- Probate services 342 6
- Treatment of valuation fee for IHT. 187 2
- Bookkeeping Rate of Pay 2,604 37
- Private doctors - Ltd company vs partnership 256 7
- What's the Barmiest Reason A Client gave you for going? 2,480 24
- Opening Balance in Sage 50 Accounts 99 3
- Sage accounts help 81 1
- Community Faux Pas 807 25
- AAT before CIMA? 118 1
- trading losses allowable? 723 13
- Digital tax accounts - what do we expect? 439 9
- Shared Network Drive on the Cloud 95 3
- Portuguese Resident having a UK Limited Company 168 6
- Here we go.... 855 25