buy to let - never declared

silvercar

You don't get tax relief on any loan beyond the value when the property was first let. So you can borrow the extra but you don't get tax relief on it.

I agree that it is really dangerous to borrow so much that you can't afford the tax bill on sale. The revenue are one of the reasons people go bankrupt.

Generali

Originally Posted by Pasturesnew
It just occurred to me ... slightly off at a tangent ... if you've not declared a BTL to the mortgage company - and, say, there were an insurance claim... could the insurance company refuse to pay out (even if they knew it was a BTL) simply because you had the wrong mortgage?

silvercar wrote: »

I doubt it. On what grounds? If they knew the property was let, how could they refuse a claim. The type of mortgage would have no bearing on the claim. (Unless it was trashed by the tenant about to be evicted due to the landlord's mortgage fraud!)

On the grounds that this didn't allow them to underwrite properly. If they'd known they were providing insurance to someone that was fraudulently misrepresenting the purpose of the loan they may have wished to charge more or decline the business.

I've got a few mates that work at Lloyds as (re)insurance underwriters and, whilst they seem to have no problem doing business with slightly disreputable types, they insist that they know what they're underwriting.