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Where Taxpayers and Advisers Meet

Allowable Expenses for Remortgaging a BTL

Martintaxes
Posts:19
Joined:Fri Apr 28, 2017 12:25 pm
Allowable Expenses for Remortgaging a BTL

Postby Martintaxes » Wed Sep 15, 2021 6:17 pm

Hi All,
Hopefully a quick question you can help me with, please!

I've just re-mortgaged a BTL that has been operating for 3 years, just for a better deal. Are the refinancing and solicitors costs allowable expenses? I was under the impression that they were not but there seems to be conflicting information on a general web-search I thought I would ask the experts!
Many thanks in advance.
Martin.

someone
Posts:525
Joined:Mon Feb 13, 2017 10:09 am

Re: Allowable Expenses for Remortgaging a BTL

Postby someone » Tue Sep 21, 2021 8:45 am

I thought so too but I've just found this:

https://www.legislation.gov.uk/ukpga/2005/5/section/58

Which suggests to me that the finance charges at least should be allowable provided you don't use cash accounting (see the previous section 57B - where I think it would be capped at 500). I don't know if solicitors costs count as "incidental costs in arranging finance" - they look like it to me but there's probably something somewhere else that also needs to be considered!

But if you are using accruals, how long should the finance charges be accrued over? The term of the loan, the term of the fixed rate period, all in the year of arranging the loan, or the estimated time until the loan will be repaid?

(I'd assume it's not "all in the year of arranging the loan" as that would be like cash accounting without the 500 limit...)

Tim.

someone
Posts:525
Joined:Mon Feb 13, 2017 10:09 am

Re: Allowable Expenses for Remortgaging a BTL

Postby someone » Tue Sep 21, 2021 8:58 am

And I got that information from here:
https://www.accountingweb.co.uk/any-answers/certificates-of-mortgage-interest-paid-landlords

Which now has a reply saying that the deduction is also valid for cash accounting.


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