Ringfencing mortgage interest?

[PJM]

Apologies if this is a basic question:

If someone has multiple properties rented out (some mortgaged, some not mortgaged), is the mortgage interest deductable from total rental income income or only deductable from the income on the properties that are mortgaged.

To put it anothe way - if the mortgage interest is MORE than the rental income on one property, can it be also offset again the income on a second rented property.

 

[Blarney]

The answer to that is probably yes and no. You cannot decide for example to allocate the interest to the value of the rental income to one property and the balance to the other. What you can do however, is because you have a loss on one as the interest is greater than the rental income, then you can offset this loss against the rental profit of the second. I know they are both similar in result, but you need to keep the accounts accurate.

Hope this helps...