INTEREST COST ON LOAN

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For a investment company who has property for rental income, they took out loan to develop the property on which they incurred significant interest cost. Can that interest cost be part of management expense? 

If not, how can we claim all the interest cost paid when the company eventually sells the property? Over the years the company has built up significant losses due to interest costs, after getting rental income for 5 years, the company has decided to sell the property. However, overall the company is making a loss as the cost price of property plus the development expenditure plus the interest cost paid is more than the selling proceeds. 

Is there any way to claim b/f losses against capital gains computation? 

Replies (4)

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Psycho
By Wilson Philips
01st Sep 2020 17:23

You say that the company has been letting the property for 5 years. Is it not a bit late to ask how the interest should have been treated?

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Replying to Wilson Philips:
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By Tax Dragon
01st Sep 2020 17:44

That's what other esteemed contributors thought: https://www.accountingweb.co.uk/any-answers/capitalized-borrowing-cost

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By Calculatorboy
01st Sep 2020 17:43

You need an accountant to be paid to sort out this mess, which involves a lot of time , dont free-load

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By MuayThai
02nd Sep 2020 16:14

The relief for interest on loans relating to investment property is given under non trade loan relationship rules

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