tax relief on mortgage interest on buy-to-let

PIM2005:

"Wholly and exclusively
The trading expenses rules in ICTA88/S74 are applied to Schedule A. This includes the ‘wholly and exclusively’ rule which says that expenses cannot be deducted unless they are incurred wholly and exclusively for business purposes, (ICTA88/S21A).

All the evidence has to be considered in determining whether an expense was laid out wholly and exclusively for business purposes. The evidence may include documents, agreements, notes of meetings and any other records. What the taxpayer says was their purpose in incurring the expense is part of the evidence but it isn’t necessarily decisive: the facts may point to another purpose. For example, suppose the taxpayer lives in London but has a holiday cottage in Wales. The cost of going down there for a three week family holiday is unlikely to meet the ‘wholly and exclusively’ test even if the taxpayer says their purpose in going was to inspect the property prior to third-party letting later in the year.

For an expense to qualify the business purpose must be the sole purpose. A non-business or private purpose prevents any deduction from business profits where there is no objective yardstick by which any business element can be distinguished from the non-business element.

But where a definite part or proportion of an expense is wholly and exclusively incurred for the purposes of the business, that part or proportion can be deducted. "