Redemption penalties

[Niroj]

Could redemption penalties when you switch lenders be treated as an expense in a BTL in addition to the interest?
Any suggestions would be greatly appreciated.

Thank you

Niroj

[Ian McTernan CTA]

Always a bit of a tricky one this, as the Revenue sometimes try and argue this is a capital cost and not a revenue one. In practice, in most cases they will allow these as an expense against the rental income in the year in which they are incurred. This is because usually you are switching to a lower rate and hence will be making a bigger profit in future on which they will get the tax!

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com

[Niroj]

Dear Ian
Thank you very much for your reply and the explanation as to why Revenue may possibly allow it as an expense! I have been searching the web for the last couple of weeks trying to find an answer but did not have any luck. Your reply makes perfect sense to me and greatly appreciated.
Thank you again.
Kind regards
Niroj