Mortgage on gifted house

getmore4less

holly_hobby wrote: »

Is this even if the monies are not re-invested back into the business i.e not used in connection with any aspect of the BTL ?

H

yes. there are some examples on HMRC site(can't remember the link)

holly_hobby

Yes I have just had a quick google myself ...

"You can release as much as you like if you use the money to improve a let property or to buy another let property.

However, if you wish to use the money for ANY PERSONAL use (such as holiday or improve home etc), you can remortgage the let property UPTO it's value at the date when it first entered your lettings business, effevtively the date when it was first let. If it was bought and used for letting from the beginning, you can only remortgage upto the original cost price.

You may be able to borrow at cheaper rate on your home but then you will not get the tax relief. Therefore, you need to weigh up the cheaper mortgage against the tax relief and see which works out better. "

Good (thanks to GM4L for post & Antro) ... thats better than nothing for the OP (lets home she has a lowish LTV on the BTL and will be able to offset most or all of the advance).

H

antrobus

It works on the basis that the owner of a lettings business can always withdraw their capital from the business, and that if the business has to borrow the money to finance that withdrawal, then the interest payable on that loan is allowable as a legitimate business expense. Although 'capital' in this sense can be different from the 'equity' in the property, it all depends on the facts of each particular case - OP hasn't given sufficient detail re their existing BTL to say one way or another, but it's something worth bearing in mind.