mortgage interest relief

by **ptpash** on Wed Jan 18, 2012 6:30 pm

I own a property in which I live. The property is mortgaged.

I am proposing to rent it out whilst I work elsewhere in the UK. The mortgage company have agreed to this and there is no need for me to convert to a buy to let mortgage.

Am i correct in assuming that the interest will not be deductible against the rent as the borrowing was not incurred wholly and exclusively for the property business (but to buy my home)?

by **section 44** on Wed Jan 18, 2012 6:32 pm

No. Interest accruing from the time that you decided to let it would be deductible.

by **ptpash** on Wed Jan 18, 2012 6:34 pm

Thank you.

Why is my "wholly and exclusively" point not correct?

by **section 44** on Wed Jan 18, 2012 6:41 pm

It's irrelevant. The interest is incurred on a loan taken out wholly and exclusively for the purpose of acquiring the property - that is relevant.

by **maths** on Wed Jan 18, 2012 7:20 pm

Interest on the borrowing used to purchase your residence is not deductible against any of your income.

However, should you at a later date let the property out (ie the property is then used for "business" purposes) any interest payable from that date is deductible against the rental income as the wholly and exclusively test to which you refer is then satisfied.