Would this work?

costingbunny_2

Is it possible to gain tax relief on your residential mortage (for your main home) in relation to the rent paid on another home you own (your old home)? I know that you can do this if you have a BTL on the rented house, but wondered if you could work it this way too?
Thanks

JimmyTheWig

As far as I am aware, you need to be able to show a paper trail of the borrowing being used to fund the purchase of the let out property.
If the mortgage is on the let out property (e.g. a BTL mortgage, as you say) this clearly shows the link.
But it could be, for example, that you live in property A mortgage free, take a residential mortgage on property A and buy property B (to let out) with that money. This would, as far as I am concerned, be buying the let out property with the money borrowed and so the mortgage interest could be offset against the rent for tax purposes.

But what I don't think you can do is have a mortgage on property A where you live, build up savings / win the lottery / come into an inherritance and buy property B outright to let out then offset the mortgage interest on property A against the rent on property B. Because you didn't use the money borrowed to buy property B.

Does that make sense?