This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Main residence mortgage interest offset against BTL

andrewlato81
Posts:17
Joined:Sun May 15, 2016 10:28 pm
Main residence mortgage interest offset against BTL

Postby andrewlato81 » Tue Feb 04, 2025 4:59 pm

Hello,

Last year I have aquired a BTL property. At the time of buying it, the bank would not lend against it due to its condition, so I went ahead and remortgaged my own home drawing £110000 out of it in order to purchase BTL property. Main residence mortgage was repayment type mortgage, declared for the purchse of investment property.

BTL cost £79k, refurbisment costs were approx £20K. there was clear transaction chain from remortgaging bank to me then to my solicitors then used for the purchase of BTL.

Interest on this remortgage comes to approx £400 per month. Can I offset this as a finance costs for my BTL business. I am aware that only 20% of it is deductible.

Many thanks
Andre

bd6759
Posts:4413
Joined:Sat Feb 01, 2014 3:26 pm

Re: Main residence mortgage interest offset against BTL

Postby bd6759 » Wed Feb 05, 2025 12:17 am

It is the purpose of the loan that matters, not what it is secured on.

You have apparently borrowed £110k and invested £99k. Only that proportion of the interest will be allowable.

andrewlato81
Posts:17
Joined:Sun May 15, 2016 10:28 pm

Re: Main residence mortgage interest offset against BTL

Postby andrewlato81 » Thu Feb 06, 2025 4:28 pm

Thank you @bd6759


Return to “Property Taxation”