I currently own a flat in the same block where I plan to buy an additional flat.
The new flat is in a better position but needs some referbishment. Once referbished we plan to move into it and rent out my current flat.
Here's my problem,
I now owe very little on my current flat and therefore there would be next to nothing in terms of interest relief on rental income.
The flat I wish to move into would have plenty of interest relief to cover rental income since I will require a mortgage. But we wish to live in it.
Remortgaging my current flat I have been told is no good?, the interest would not be allowable.
Both flats are of equivalent value, but depending in which one I live means the difference between almost 40% tax or almost nil.
Any Solutions?
P.S. I do not wish to stay where I am and rent out the new flat or sell my current flat (defeats the object of what I'm trying to do!)
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