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Where Taxpayers and Advisers Meet
reclaim 20% tax credit on BTL interest
Hii I have secured a BTL loan secured on my residential property in order to purchase a new BTL property, everything is done i.e the legal paperwork and the valuation etc. I am approaching the expiry of the mortgage offer and have not yet found an appropriate BTL property. The BTL mortgage is an offset mortgage, and my broker tells me I should be able to get the lender to advance me the funds now even though I haven't yet found the right BTL property and I can simply place the funds in the offset savings account thereby reducing interest payable to nil. My question is, when I do find the right BTL property and draw down the funds from the offset savings accoun,t will HMRC regard this as funds used solely for the BTL (and therefore I can reclaim the 20% interest) or will they say I have funded this BTL purchase from my own savings which happened to have been advanced to me the way of a remortgager and therefore no 20% tax-free claim is permissible. I have searched but this question has never seemed to have come up before, I will possibly ask HMRC but I'm not convinced I will get a straight answer! any help provided will be greatly received thank you!