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Mortgage Cashback

Mortgage Cashback

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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?

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By SXGuy
18th Jul 2019 10:35

Well theres no discount on the interest so I don't see where interest relief comes in to it.

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