Barclay’s mortgage deals offers £500 cash back. With cash back option, the interest rate is higher.
HMRC’s manual PIM2074 says to consider three aspects interest relief, CGT and IT. Looks non-taxable from CGT and IT points of view but the interest relief point got me slightly confused.
‘interest relief: where the scheme provides for a discount on the interest due on the loan, interest relief is limited to the net amount paid’
As taking the cashback provides a higher interest rate is this therefore a negative discount and the cashback should be netted off against the mortgage interest?