Sole Trader Mortgage or Business Loan

A sole trader running a camping site has three different types of debt.

1) Personal Mortgage on the owner's house
2) Business Loan
3) Business Overdraft

Interest incurred on the business loan and business overdraft is a tax allowable expense. The mortgage interest on the owners house is not.

Mortgage interest rates are lower than the interest paid on the other forms of debt.

Is it acceptable to re-mortgage, secured on the business, repay the loan and the overdraft and *retain* the benefit of the tax shield. i.e. treat the new enlarged mortgage loan interest as tax allowable (either in part or in entirety)

Your comments are much appreciated,
Dan Griffiths

Comments
There are 7 comments. Login or register to view them.

Cost of Capital

AccountingWEB |
AccountingWEB's picture

Thank You All,

Dan Griffiths |

Thanks, Chris

AnonymousUser |

Isn't the question about repaying the business loans?

newmoon |

Be Careful

AnonymousUser |

Re overdrawn capital accounts

cbales |

Accruals cut both ways

AccountingWEB |
AccountingWEB's picture