Mortgage Product Fee Tax Deduction?

GeddyMortgage

Hello,

Ahead of preparing what I owe for my first year in receiving rental income. I have been reading what costs i'm legally allowed to deduct from this income. One which I've seen conflicting opinions on, is Mortgage Product fees. Does anyone here know if this is an acceptable deduction?

i.e - I remortgaged a residential mortgage to a BTL in June 2017, the BTL mortgage had a product fee of £1,495.

thanks,

AnnaB

amnblog

Mortgage fees are an allowable expense but tax relief on mortgage fees is included under the tax relief changes from April 2017.

How the changes affect you has a lot to do with your tax rate and is a question for your Accountant.

GeddyMortgage

Thankyou,

Yep, makes sense.

GeddyMortgage

I also read you can apply deductions for the cost of a home office? Though the details are vague, I imagine this is a very small amount. But for my tax affairs to be completely accurate i thought it would be the right to do by looking into this.

Anyone?

csgohan4

GeddyMortgage wrote: »

I also read you can apply deductions for the cost of a home office? Though the details are vague, I imagine this is a very small amount. But for my tax affairs to be completely accurate i thought it would be the right to do by looking into this.

Anyone?

Accountant is your best first port of all as they will know your individual circumstances and what your paying them for

Thrugelmir

GeddyMortgage wrote: »

I also read you can apply deductions for the cost of a home office?

You can. Though does letting a single property warrant a permanent office in your home?

GeddyMortgage

I'm about to purchase another BTL at the end of February. And a third much later this year. As it stands my plans are to self manage these. In which case I would want a designated space in my home to deal with all issues relating to these properties.

But this does bring me onto my next question. As I said, i'll be purchasing a BTL end of Feb. Again there is a mortgage product fee of £1495. For this property I WON'T receive any rental income from this property this side of the April tax year deadline.

However I do already have a BTL that i've received rental income from since June 2017. Can I use the product fee on this 2nd BTL property as a legal tax deduction? viewing it as a total portfolio cost for rental properties? or is that not allowed as it is for a different property than the one i'm already receiving rent for?

AnnaB

pinklady21

You might be better asking your tax questions on the Cutting Tax board.

Thrugelmir

GeddyMortgage wrote: »

In which case I would want a designated space in my home to deal with all issues relating to these properties.

How many hours a week do you expect to be using this desiginated office space?

(Playing devils advocate.)

GeddyMortgage

Difficult to answer, never been in this position before. Though one of the properties will require substantial works before being let. Organising that, and advertising, and general management for all these properties will occur at this home office.

btw, Is it only the hours that you're able to claim for under the umbrella of home office tax reduction? Or is there more to it than that?

csgohan4

careful with claiming the home as your office, you would have to make sure it is quantifiable and audited if you ever had the pleasure of a HMRC investigation.

Better to not claim than to risk falling foul over some peanuts