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Kurt Barlow

Mortgage Interest On Rental Property

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24 hours from handing my house over to letting agent.

As a newbie landlord I am not sure on the position of tax and mortgage interest payments. I understand interest on a BTL mortgage is tax deductable. However my mortgage is the same as for when I was an Owner occupier (yes I have told the BS) and it has been suggested interest on this type of mortgage isn't deductable.

Can someone point me in the direction of some definitive HMRC guidance on this matter?

Cheers KB

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http://www.hmrc.gov.uk/worksheets/sa105-notes.pdf

'Box 22 Rents, rates, insurance, ground rents etc.

Include:

• rent you pay under a lease of a property that you let

• business rates

• Council Tax

• water rates

• ground rents or, in Scotland, feu duties

• property and contents insurance.'

'Box 23 Property repairs, maintenance and renewals

Repairs

Include in box 23 expenses that prevent the property from deteriorating

such as:

• exterior and interior painting

• damp treatment

• stone cleaning

• roof repairs

• furniture repairs

• repairs to any kind of machinery supplied with the property.'

'Box 24 Loan interest and other financial costs

Include:

• the costs of obtaining a loan or an alternative finance arrangement to buy

a property that you let

• any interest on such a loan or alternative finance payments.'

'Box 25 Legal, management and other professional fees

Management fees paid to an agent to cover rent collection, advertising and

similar administrative expenses can be deducted.

The normal legal and professional fees for renewing a lease can be deducted

if the lease is for less than 50 years. You can also deduct the professional

fees incurred in evicting an unsatisfactory tenant, with a view to re-letting,

or in appealing against a compulsory purchase order.

You cannot deduct:

• expenses incurred in connection with the first letting or subletting of a

property for more than a year. These include legal expenses such as the

cost of drawing up a lease, agents’ and surveyors’ fees and commission

• any costs of agreeing and paying a premium on renewal of a lease

• fees for planning permission or registration of title on property purchase.'

Cheers Pedro. Most appreciated :)

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Cheers Pedro. Most appreciated :)

Note that any bills for ongoing services have to be apportioned between the tax years in which the service is used. Just because you get a bill in a TY doesn't mean that you can claim all of it in that TY (it all gets bloody complicated, believe me).

tim

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probably get banned for suggesting it, but I found the landlordzone forums useful back in the day.

Nah - lets face it - someone has to provide these STR scumers with a roof over their heads :P

cheers

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  • 239 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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