Holiday Home tax relief

JC2003

Hi I'm new to the forum so hope I'm posting correctly. 
I'm a Scottish tax payer and I'm planning buying a holiday home in Scotland so I can rent it out. I would like to know if I can get tax relief on a mortgage if I take it out on the holiday home or would I be better off taking the mortgage out on my house, which I own outright. 
Cheers 

[Deleted User]

JC2003 said:

Hi I'm new to the forum so hope I'm posting correctly. 
I'm a Scottish tax payer and I'm planning buying a holiday home in Scotland so I can rent it out. I would like to know if I can get tax relief on a mortgage if I take it out on the holiday home or would I be better off taking the mortgage out on my house, which I own outright. 
Cheers 

When you say holiday home are you going to be solely using it as your own holiday home or will you be running it as a business and letting it out to other people?

JC2003

Letting it out to other people through their booking site.

macman

So its a BTL mortgage? A holiday home is generally taken to mean a second home.

davidmcn

macman said:

So its a BTL mortgage? A holiday home is generally taken to mean a second home.

"BTL mortgages" are generally for "normal" tenancies, not holiday lettings. I think mortgages may be available but unlikely to be as readily available - as the OP suggests, taking out a further advance secured on their main residence would probably be easier.

AnotherJoe

JC2003 said:

Hi I'm new to the forum so hope I'm posting correctly. 
I'm a Scottish tax payer and I'm planning buying a holiday home in Scotland so I can rent it out. I would like to know if I can get tax relief on a mortgage if I take it out on the holiday home or would I be better off taking the mortgage out on my house, which I own outright. 
Cheers 

Certainly in England, where tax relief is available on mortgage interest, then it doesn't matter if the mortgage is against the rental property or against another property, but its being used for the rental.

It obviously makes the maths/documentation easier if you dont have a mortgage on your own home to start with since then its clear that 100% of that mortgage interest is against the holiday let. I did this myself some years back (on a BTL, not holiday let) and prorated it as I already had a small mortgage on my house.

But I dont know what the Scottish law on interest relief is and whether yours would be applicable in the first place.

davidmcn

AnotherJoe said:

JC2003 said:

Hi I'm new to the forum so hope I'm posting correctly. 
I'm a Scottish tax payer and I'm planning buying a holiday home in Scotland so I can rent it out. I would like to know if I can get tax relief on a mortgage if I take it out on the holiday home or would I be better off taking the mortgage out on my house, which I own outright. 
Cheers 

But I dont know what the Scottish law on interest relief is and whether yours would be applicable in the first place.

The only Income Tax differences in Scotland are to the percentage rates and bands, I don't think any of the other rules are devolved.

JC2003

I take it from all your answers that it would be best to take mortgage out on my present house and because I've borrowed the money for a business then I should get tax relief on the interest. Thanks