Are finance costs tax deductible in this scenario?

[doobrey]

Would be grateful for informed comment on the following scenario -

I own two properties (Property A and Property B) in my own name, and have an SPV Ltd Co. I remortgage Property A and transfer the proceeds to my company as a Director's Loan. The company then buys Property B from me. Are my finance costs for the mortgage on Property A tax deductible?

[bd6759]

Depends why property B was being acquired, and whether you need to meet the full-time working condition.

[doobrey]

Property B is being acquired as a business asset, for rental.

I am sole Director and shareholder of the SPV, and therefore meet the material interest condition. As such no, I don't believe I need to meet the full-time working condition.

[doobrey]

Bump.

I propose moving a property into a Ltd company, with a remortgage to fund a Director's Loan to fund the purchase. Is there any reason why finance costs on the remortgage should not be fully tax deductible in this scenario?