higlufc Posted October 15, 2013 Report Share Posted October 15, 2013 HI I have just under 4 years left on my btl mortgage worth about 12K and have a 53k mortgage on my own house. if I remortgage my btl home and pay mine off will I be able to claim all the fees back as tax deducable cheers Link to comment Share on other sites More sharing options...
Carryon Regardless Posted October 15, 2013 Report Share Posted October 15, 2013 The purpose of the loan is what matters. If the tax man asks what the money was used for and it's clear it's not for business purposes then you shouldn't be able to claim the interest or the fees. Link to comment Share on other sites More sharing options...
Richlist Posted October 19, 2013 Report Share Posted October 19, 2013 The purpose of the loan is what matters. If the tax man asks what the money was used for and it's clear it's not for business purposes then you shouldn't be able to claim the interest or the fees. I don't think thats quite right. You can remortgage your BTL and offset the interest payments against income tax ...up to the original price of the property when it entered your rental business. Link to comment Share on other sites More sharing options...
Carryon Regardless Posted October 19, 2013 Report Share Posted October 19, 2013 That sounds reasonable RL. The principle I was applying was around remortgaging the home and using the funds to invest in BTL. By your principle it seems reasonable that we can claim the interest on loans as long as the total value of loans doesn't exceed the total original purchase price of properties in the portfolio. How does that sound ? Link to comment Share on other sites More sharing options...
Richlist Posted October 20, 2013 Report Share Posted October 20, 2013 Yes thats my understanding of how things works. So, an example might be...... Someone buys a property for £100K with a £50K mortgage and lets it out. Five years later, the property is worth £200K and they remortgage for £100K. They spend the extra £50K on anything they want....a sunseeker yacht or the deposit on a second property. They claim the interest payments on the full £100K because that was the value of the property when it entered their rental business. They could of course remortgage for more than £100K but they can still only claim interest payments up to the value of the property when it entered the rental business......so a simple calculation would be required. In addition, during the course of the time the property was let if they installed new windows/ doors @ say £3K &/or a new roof @ £5K then interest payments on money borrowed to carry out that work could also be offset against income tax. In these tough times its important that we all claim what we are entitlement to claim. Link to comment Share on other sites More sharing options...
Carryon Regardless Posted October 31, 2013 Report Share Posted October 31, 2013 A thought as to where this principle fails. An investor buys a £125k btl with £100k mortgage in 2007, all interest is offset against tax. By 2012 the value has fallen to £50k, the purpose of the loan was for the btl so the interest on the original £100 mortgage is still allowable, to my mind.. Link to comment Share on other sites More sharing options...
Richlist Posted October 31, 2013 Report Share Posted October 31, 2013 By 2012 the value has fallen to £50k, Extremely unlikely.....although no doubt, if you look hard enough you will find a property somewhere that matches your example ! the purpose of the loan was for the btl so the interest on the original £100 mortgage is still allowable, to my mind.. Yes of course it is. Why would you want to get it officially revalued ? You are entitled to offset the loan used.....in this case.....to purchase the property. Link to comment Share on other sites More sharing options...
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