Residential mortgage used to pay off buy to let mortgage and claim interest relief

tojoslaffy

Is it possible to (1) remortgage my residential property, (2) use say £20,000 of this to reduce a buy to let mortgage, and then (3) use the interest paid on this £20,000 to claim interest relief as part of my buy to let tax return and the 20% tax credit available. I’m sure I read somewhere that this was allowable so long as it was clear that the £20,000 had been used as part of the rental business. Thanks.

poseidon1

tojoslaffy said:

Is it possible to (1) remortgage my residential property, (2) use say £20,000 of this to reduce a buy to let mortgage, and then (3) use the interest paid on this £20,000 to claim interest relief as part of my buy to let tax return and the 20% tax credit available. I’m sure I read somewhere that this was allowable so long as it was clear that the £20,000 had been used as part of the rental business. Thanks.

The blog below might assist, although the examples given relate to financing purchases of BTL property -

https://www.taxinsider.co.uk/refinancing-buytolet-properties

Sam_666

You cant do that with current morgage, but can when remorgaging next time, if you plan it propery.

silvercar

 The basic rule that relief is available on borrowings up to the value of the property when it was first let. Doesn’t matter where, or if, it is secured.

mlz1413

poseidon1 said:

tojoslaffy said:

Is it possible to (1) remortgage my residential property, (2) use say £20,000 of this to reduce a buy to let mortgage, and then (3) use the interest paid on this £20,000 to claim interest relief as part of my buy to let tax return and the 20% tax credit available. I’m sure I read somewhere that this was allowable so long as it was clear that the £20,000 had been used as part of the rental business. Thanks.

The blog below might assist, although the examples given relate to financing purchases of BTL property -

https://www.taxinsider.co.uk/refinancing-buytolet-properties

Thanks for this! What a brilliant article,  clearly written with examples to explain. 

poseidon1

mlz1413 said:

poseidon1 said:

tojoslaffy said:

Is it possible to (1) remortgage my residential property, (2) use say £20,000 of this to reduce a buy to let mortgage, and then (3) use the interest paid on this £20,000 to claim interest relief as part of my buy to let tax return and the 20% tax credit available. I’m sure I read somewhere that this was allowable so long as it was clear that the £20,000 had been used as part of the rental business. Thanks.

The blog below might assist, although the examples given relate to financing purchases of BTL property -

https://www.taxinsider.co.uk/refinancing-buytolet-properties

Thanks for this! What a brilliant article,  clearly written with examples to explain. 

Yes the Tax insider is a useful resource covering the general UK tax  landscape, with a whole host of useful articles from a range of different CTA authors.