New landlord advice needed on tax

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lozzabeth wrote: »

Would Chaucer be able to offset profit against the interest element of his second property mortgage?

I'm about to rent out my house and move into another and a friend of mine with a rental portfolio currently offsets the profit on the rental properties against the interest on her residential property.

It doesn't sound right to me, however her Accountant handles this for her and says as long as you can prove that the profit is going towards the rental on the residential property then it's fine.

I'm wondering if this is a tax loop and she's actually living in a house purchased as buy-to-let, rather than residential and claiming it's empty? I guess all of the properties would then need to be registered under a business name....?

You can do offset the interest IF you remortgage your own home to purchase the BTL property, you need to be able to clearly demonstrate that is how you financed the business. It's quite possible she has a residential mortgage given she lives in the house.
http://www.hmrc.gov.uk/manuals/pimmanual/