How to reduce tax on rental income

wide_skies

Hello there,
Apologies if I am hijacking this thread inappropriately. If my dad gave me cash raised from remortgaging his house to allow me to buy a BTL, I take it I could not offset the interest secured on his house against the rental income from my 'new' BTL? I'm guessing my dad could offset it himself if he owned the 'new' BTL solely himself?

We are planning a largish refurb on the 'new' BTL. I guess we could always set these costs against the rental income instead?

Thank you.

antrobus

Ah, that's why this ancient thread has been revived.

polzovatel wrote: »

Hi, We bought a new, bigger, house as we could not sell the old one for 5 years
and want to rent the old house out. Could I claim interest for the mortgage which I took for the new house?
Thanks

No.

marshmallows_etc wrote: »

Hello there,
Apologies if I am hijacking this thread inappropriately. If my dad gave me cash raised from remortgaging his house to allow me to buy a BTL, I take it I could not offset the interest secured on his house against the rental income from my 'new' BTL? I'm guessing my dad could offset it himself if he owned the 'new' BTL solely himself?

I believe that your understanding is correct.

marshmallows_etc wrote: »

We are planning a largish refurb on the 'new' BTL. I guess we could always set these costs against the rental income instead?

Not necessarily. Your refurbushment is likely to be capital expenditure, i.e. you will be able to claim back the cost against the profit you might or might not make on selling the property, but not against the rental income you receive in the meantime. Consult a local accountant for some proper advice.

wide_skies

Thank you antrobus-very useful.

polzovatel

Thank you for your reply.
So what are my options - do I need to transfer the mortgage to the old house or can ask the bank to secure this mortgage against the old house?