Hi I wonder if anyone can help....
We set up a partnership to develop property. The property was purchased in the joint names of the partners and the purchase funded partly by mortgage and partly by a loan taken out by the partners (not in the partnership name) The renobvations to the property were also funded by the individual partners from a variety of sources - loans credit cards etc throughout the development. I would like to know how to treat the various loans for purchses and development as no capital as such was introduced by the partners at the outset.
1. Can interest relief be claimed for the mortgage?
2. Can interest relief be claimed for the 'loans' and how would best could this be calculated since the amounts were provided from various sources and at different tmes over the whole accounting period? How would one account for the interest in the partnership accounts?
3. The property was re-mortgaged for a higher amount prior to being sold. Should the equity released be used to pay off the loans?