mortgage tax relief

richrob

Four years ago my son bought a house for me to live in and has to date paid the mortgage. The property was remortgaged last year to assist in purchase of another property which is his home.
I have scoured the site and also the IR site but unable to clarify the tax situation to either of two scenarios and would be grateful for any input -
Firstly, if we maintain the status quo with him paying the mortgage, should he be entitled to any tax relief - I know the remortgage part is out of the equation as it wasn't used for this property....... I couldn't be classed as a dependent relative in terms of incapacitation or age
(quite!) if that is an IR factor.
Secondly, if I were to pay rent to cover the mortgage payment - as a higher rate taxpayer he is concerned that he would be liable for tax on these payments but as I understand it if there is no profit there is no tax liability.
Realise CGT would come into play in due course but the property was bought for the long haul - pension fund - and who knows what the rules will be by then.

dunstonh

MIRAS tax relief was abolished many years ago.

Any rent he recieves treated as income (minus costs)

deemy2004

As mentioned

MIRAS went many years ago

Your son would be taxed on his rental profit (net of expenses) at the highest rate or 40% in his case.

Robert_Sterling_3

On the basis that if three people tell you something it might well be true I will also say the tax relief on the interest paid on a mortgage has been abolished long since.

robnye

just to confirm.

MIRAS was abolished from 6th April 2000

see

http://www.mortgages.co.uk/advice/tax-relief.html

sarahlouise210

MIRAS (mortgage interest tax relief at source) was abolished in 2000 but you can claim loan interest against letting income (only the interest though) This particular case would need expert advice however as any expenses allowed have to be wholly and exclusively for the letting- in this case the total loan has been remortgaged for his sons own home and as such would not relate exclusively to the rented property. As a general guide you can set expenditure for insurance, Admin costs, management and loan interest plus general reapirs but not replacements (such as changing wooden windows for UPVC windows - this is a capital allowance and is set against any future Capital gain. If the property had not been remortgaged then it would be a simple case of any rent being paid covering the loan interest and no additional tax would be due.