I have a client who took out a 2nd mortgage on their personal property to fund a deposit on a BTL property bought via their Ltd Co (close company)
summary is : £250k borrowed against their property, then directly transferred to their business bank account in order to fund the deposit.
I believe the interest on the £250k could qualify as a qualifying loan and therefore be available for relief on their self assessment. However when entering this into my software (digita) there are two options- "loans" or "loans relating to property " if I choose the first option then the interest relief is not restricted, however if I choose the second option the relief is restricted (client is 40% tax payer).
Question is: should this loan be subject to the property interest restrictions or not? As far as I can see it's only restricted if lent to partnerships, not ltd cos, but would be good to get others thoughts / experience on this.