Interest Relief Allowable on a residential mortgage

C

Cameo

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Hi there

Can anyone confirm whether it is possible to take out a loan on your home, thereby benefiting from a residential mortgage rather than a commercial mortgage rate, and still offset interest against profit because the loan is for business purposes.

Ie this assume you have profits from a business which the interest paid on the loan can be offset.

Someone has told me their accountant advised them to do this.

Any comments appreciated.
 
Cameo said:
Hi there

Can anyone confirm whether it is possible to take out a loan on your home, thereby benefiting from a residential mortgage rather than a commercial mortgage rate, and still offset interest against profit because the loan is for business purposes.

Ie this assume you have profits from a business which the interest paid on the loan can be offset.

Someone has told me their accountant advised them to do this.

Any comments appreciated.
Click to expand...

The purpose for which the loan money is used defines whether or not it is allowable, not what the loan was secured against. If the money borrowed was used in the business then it is tax deductible against business profits.
 
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