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Where Taxpayers and Advisers Meet

Tax relief on personal loans

Posts: 2
Joined: Fri Apr 19, 2019 10:39 am

Tax relief on personal loans

Postby chriscanning7 » Fri Apr 19, 2019 10:51 am

Thank you for your help.
I am trying to understand what tx relief I can get on my buy to let property. I purchased an apartment in bulgaria with a personal loan from TESCO bank. I also own a BTL property in the UK. When I complete mt tax, can I offset the interest on the personal loan.

My understanding is that I would treat the BTL and property in Bulgaria as one business. Therefore I can claim tax relief on the BTL mortgage interest and also claim tax relief on the interest portion of the personal loan. Is this correct or is it more complicated then this?

Many thanks

Posts: 251
Joined: Tue Sep 26, 2017 6:28 pm

Re: Tax relief on personal loans

Postby AdamS93 » Sat Apr 20, 2019 9:19 am

You will need to put the income from your overseas property in the 'overseas income' section of your tax return (subject to Double tax treaty rules which I don't really want to look at on a Saturday...)

With regards to interest, the rules have changed and you can no longer simply just offset mortgage interest against rental income (fairly complex rules for someone with little tax knowledge).

As for the interest on the personal loan, you can probably treat it the same as mortgage interest with a few exceptions.

As your tax affairs become more complex, it is probably worth engaging an accountant to complete your return for you (at least for this year so you know what to do next year).

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