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

Early repayment charge (ERC) mortgage

nawaz83
Posts:7
Joined:Fri Dec 25, 2020 11:38 pm
Early repayment charge (ERC) mortgage

Postby nawaz83 » Tue Feb 16, 2021 5:10 pm

Hi all,

I am sure this has been answered elsewhere but I am stuggling to make the search function give me the answer, so grateful for any input.

I am in the process of selling a property and will incur an early repayment charge (ERC) on redemption of the mortgage as a result of the sale. I would like to know is a mortgage ERC tax deductible for CGT purposes or is it subject to income tax? And if subject to income tax will it be deemed a financing cost therefore restricted to 20% relief for income tax purposes?

Many thanks

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Early repayment charge (ERC) mortgage

Postby maths » Tue Feb 16, 2021 8:37 pm

Not CGT.

It's an incidental cost of finance.

nawaz83
Posts:7
Joined:Fri Dec 25, 2020 11:38 pm

Re: Early repayment charge (ERC) mortgage

Postby nawaz83 » Wed Feb 17, 2021 2:49 pm

Thanks, gotcha


Return to “Property Taxation”