offset property income tax against rented flat

holly_hobby

OO's comments are absolutely correct re permitted deductions, assuming there is a clear audit trail between the 2, and that the element of resi mge interest being offset, mirrors that invested into the business as a direct result from the equity release exercise(s).

The only issue to be mindful of is in relation to the mortgage application itself and the lenders affordability assessment - which on a residential application is based on the individuals income, as oppossed to a straight BTL application, where affordability (not withstanding any min income requirements), is actually assessed on the rental income itself (@125% of mge interest).

Accordingly, its obv that the amount of equity released to fund any BTL arrangement from a residential dwelling (assuming sufficient free equity and acceptable LTV), will actually be dictated by the applicants income (net of other commitments), which may of course restrict the amount of BTL financing available at resi mge rates.

Hope this helps

Holly x