gbbmotors Posted January 5, 2009 Report Share Posted January 5, 2009 hi all I bought a property to renovate and sell in dec 2007. This was purchased by remortgaging my own property. House prices collapsed and I am now renting property out sept 2008. I have been told that I will not be able to offset my mortgage interest against rent for tax purposes as I haven't got a mortgage on the letted property. Even if I now get a buy to let mortgage on this property it will not be valid as I cannot prove I originally borrowed money for this property. Surely landlords change their mortgages fairly regularly on the same property and do not have to prove how they originally purchased it. Sorry if this sounds a bit muddled its my first post. Would be very grateful if anyone could advise me on my situation. Cheers George Link to comment Share on other sites More sharing options...
climbinghigh92 Posted January 5, 2009 Report Share Posted January 5, 2009 as long as your names on the deeds to the house and the house is sturcturly sound and the right money your getting the mortgae on it then you should be able to get one though i would recomend poping in to a few local banks and speeking to the mortgage consultaint i would recomend you go into barclys and just say all whats been said and ask for a mortgage qutoation and some information. Link to comment Share on other sites More sharing options...
Melboy Posted January 6, 2009 Report Share Posted January 6, 2009 hi all I bought a property to renovate and sell in dec 2007. This was purchased by remortgaging my own property. House prices collapsed and I am now renting property out sept 2008. I have been told that I will not be able to offset my mortgage interest against rent for tax purposes as I haven't got a mortgage on the letted property. Even if I now get a buy to let mortgage on this property it will not be valid as I cannot prove I originally borrowed money for this property. Surely landlords change their mortgages fairly regularly on the same property and do not have to prove how they originally purchased it. Sorry if this sounds a bit muddled its my first post. Would be very grateful if anyone could advise me on my situation. Cheers George You cannot offset your mortgage interest on your primary residence to a tax relief on a second property as you state you paid cash for the second property and it is not an allowable tax relief as no mortgage actually exists does it. HMRC are quite clear on this policy. Any doubts contact a tax adviser and I am positive they will tell you the same. Mel. Link to comment Share on other sites More sharing options...
gbbmotors Posted January 6, 2009 Author Report Share Posted January 6, 2009 Thanks Mellboy If the remortgage of my own property was to buy another property would this help. Link to comment Share on other sites More sharing options...
gbbmotors Posted January 8, 2009 Author Report Share Posted January 8, 2009 Hi All For anyone out there thats interested I have done some more investigation into this. Interesting that the taxman wants to know where you suddenly got 100000 from but not interested when trying to claim tax relief. Anyway I spoke to a tax accountant who was in exactly the same situation, remortgaged his house to fund purchase of another, but mortgage company didn't ask what remortgage was for so obviously difficult for taxman to assess claim. He showed a direct link of funds from mortgage company to his own bank account, then his own bank account to conveyancing solicitor then from solicitor to house purchase. This direct link was enough to satisfy the taxman that this was a bona fide loan. He is now claiming tax relief and living happily ever after. Does this sound like a valid way round to experts out there. Cheers George Link to comment Share on other sites More sharing options...
plym77 Posted January 26, 2009 Report Share Posted January 26, 2009 It certainly is. You can take a mortgage on your own home to finance a BTL and claim the appropriate mortgage interest. You should however show the link so structuring is important. Loan structuring is a valid planning excercise and something I review quite regularly for my clients Hope this helps Sherena Link to comment Share on other sites More sharing options...
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