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  • FIRST POST
    • UKSBD
    • By UKSBD 7th Oct 17, 7:06 PM
    • 474Posts
    • 148Thanks
    UKSBD
    Have I claimed tax allowance when I shouldn't have?
    • #1
    • 7th Oct 17, 7:06 PM
    Have I claimed tax allowance when I shouldn't have? 7th Oct 17 at 7:06 PM
    After reading it is the purpose of the loan rather than what loan is on, I'm wondering if I claimed tax relief when I shouldn't have?


    These are circumstances;


    Owned main residence with a £45k mortgage on it.


    Bought a new house cash


    Spent 12 months doing up new house and then moved in to it


    Spent next 12 months doing up old house, spending about 15k on it (new roof, re-plastering, new windows, new bathroom, new kitchen, new heating system)


    After original house was finished took out a 60k BTL (or similar) to pay off existing mortgage and pay for the work done on the property.


    Should I have claimed for the interest element of this 60k mortgage, just the £45k, just the £15k or none of it?
Page 1
    • PField
    • By PField 7th Oct 17, 7:46 PM
    • 88 Posts
    • 66 Thanks
    PField
    • #2
    • 7th Oct 17, 7:46 PM
    • #2
    • 7th Oct 17, 7:46 PM
    You can claim up to the value of the 1st property or money borrowed ( which ever is lower) at the time the property is introduced into the business ( available to let).
    Did you borrow money to do up the second house? If so you can claim on that too. Doesn't need to be a mortgage (BTL or otherwise) any boorrowing will do. The rational used by the HMRC is had you not introduced the first property into the business ( you sold it) you would not have needed to borrow for the second property ( to purchase or renovate).
    • UKSBD
    • By UKSBD 7th Oct 17, 7:55 PM
    • 474 Posts
    • 148 Thanks
    UKSBD
    • #3
    • 7th Oct 17, 7:55 PM
    • #3
    • 7th Oct 17, 7:55 PM
    Thanks.


    No I didn't borrow anything for the 2nd property (now home) used up all my savings


    Just had the £60k mortgage (£45k and £15k) on the property we let out before the tenant moved in.


    From what you say though I am fine claiming back the tax on the interest only element of the full £60k - that's a relief
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