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randal_bond

Buy to let property with mortgage - what can be put against tax

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Hi.

We purchased buy to let property with a small 5 year mortgage.

1. We paid 3% stamp duty on the sale (£4000). Can it be put against tax?
2. Can we put the mortgage repayments against tax because we heard from our mortgage broker that tax relief is fazed out gradually, and we can put 25% against tax in the first year.

Thank you.

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The following purchase costs can usually be claimed against CGT......legal fees, searches, land registry costs, stamp duty land tax, costs associated with raising finance to purchase.

Probably best to use an accountant for the tax return in the first year at least or you run the risk of under claiming allowable costs for CGT and income tax.

 

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Are you talking about Capital Gains Tax when we sell the flat ? ....... I was talking about personal income tax ...... can we put the Stamp duty against our personal tax for the year ? And you couldn't share a link to read up on it?  Thank you.

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Yes that's correct......capital gains tax. You offset the cost against CGT when you sell the property. You can't offset SDLT or any of the other CGT items I listed against income tax. That's the rules.

It's not stamp duty any more, it's called SDLT.....stamp duty land tax.

No I don't have a link. I'm sure if you search the web you'll find something.

Property tax is complex.....it's a big learning curve or get an expert to deal with it for you.

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I know you have just bought the property. The costs associated with buying that property can ONLY be offset against capital gains when you eventually sell at some point in the future.

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Having just sold a renovated property and now in the process of handling the HMRC side of taxation for CGT and I am fairly clued up now on what you can and can't claim.

To answer Randell Bond No.1 question the answer is no......you can only claim SDLT back as CGT relief on your 2nd property when you sell.

No. 2 Question.  Look up Section 24 which is now in force for what the current position is re tax relief on mortgage payments.

Section 24 came into force April 2019.

HMRC do provide a comprehensive list of what you are able to claim when selling on AND what you can claim when setting up a rental property for tenants.

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