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Where Taxpayers and Advisers Meet

Can I deduct residential mortgage interest from rental income?

jaydee
Posts: 4
Joined: Wed Aug 06, 2008 3:22 pm

Postby jaydee » Wed Aug 15, 2007 3:54 am

I plan to rent out my house when I move in with a friend. I have a repayment residential mortgage. Is the residential mortgage interest deductible against the rental income? Or do I have to switch to a buy to let mortgage to qualify for deduction against rental income?

Thanks, Jill

wamstax
Posts: 1868
Joined: Wed Aug 06, 2008 3:39 pm
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Postby wamstax » Wed Aug 15, 2007 4:22 am

any bona fide interest payable in respect of the let property will be deductible in arriving at your land and property income whatever it is described but you would be best to check with your mortgage company and insurers regarding such letting (and before you do it) to ensure that all is in order financially
regards
bill@wamstaxltd.com
http://www.wamstaxltd.com
regards and hope this helps
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Peter D
Posts: 10668
Joined: Wed Aug 06, 2008 3:37 pm

Postby Peter D » Wed Aug 15, 2007 5:12 am

Bill is spot on. You have to have permission form your provider to let your property. This is a change of use and must be declared, same with insurers. Regards Peter

jaydee
Posts: 4
Joined: Wed Aug 06, 2008 3:22 pm

Postby jaydee » Wed Aug 15, 2007 5:21 am

Thank you both vey much. I just needed to check because someone told me that if the original purpose of the mortgage was not for letting then the interest would not be allowed by the IR.

Jill

Peter D
Posts: 10668
Joined: Wed Aug 06, 2008 3:37 pm

Postby Peter D » Wed Aug 15, 2007 6:49 am

Remember it is only the mortgage interest, NOT any capital repayment. I would also add that if you re mortgage the property before first let you can gain all the interest of the remortgage no matter what you do with the money but it should be declared to the provider that the reason for the loan is to 're-capitalise your rental business'. Regards Peter

Brian C
Posts: 17
Joined: Wed Aug 06, 2008 4:02 pm

Postby Brian C » Sun Feb 24, 2008 1:04 pm

Sorry for butting in on someone elses question:
I remortgaged my property £15K to £65K before I rented it out in April 06. So I could buy a second property with my partner.
Can I not remortgage my rental property again and claim tax relief on the interest?
What if the remortgage is for house improvements on the rental property?


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