Tax return & BTL: is mortgage arrangement fee deductable?

Jo_anne_2

Hi,

I have tried to find this out from the online IR docs, searching this forum and googling but I am still not sure. Can you claim the mortgage arrangement fee as a tax deductable expense when completing a self assessment? Reading this...

"Costs incurred in obtaining loan finance for a rental business are generally deductible in computing rental business profits provided they relate wholly and exclusively to property let out on a commercial basis (see PIM2005). These costs include loan fees, commissions, guarantee fees and fees in connection with the security of a loan. (ICTA88/S77)."

...suggests to me that you can, but elsewhere I have read that costs involved in purchasing the property are not deductable as expenses (with the example of conveyancing fees, surveyor, etc. Fair enough) although it is not clear to me whether the mortgage arrangement fee falls into this category or as a cost 'incurred in obtaining loan finance'. I'd be really grateful if someone could clarify this for me. Thank you

MarkyMarkD

Yes.

They are not costs involved in buying the property - you could buy the property for cash and wouldn't incur these costs. They are costs in obtaining loan finance and therefore a deductable expense.

Jo_anne_2

MarkyMarkD wrote:

Yes.

They are not costs involved in buying the property - you could buy the property for cash and wouldn't incur these costs. They are costs in obtaining loan finance and therefore a deductable expense.

Phew, thanks for the reply MarkyMarkD. I am finding this whole self assessment thing very confusing, but I am getting there bit by bit