Interest relief on remortgage

N

noe

Guest
Hi,
I purchased my PPR with partial funding from a mortgage [Mortgage A] and a loan from family. A couple of years later I remortgaged and used the new mortgage [Mortgage B] to pay off the original mortgage plus the loan from my family.

I now want to let out this house as an investment property. Will interest payments on Mortgage B be allowed against tax on rental income, or will they be disallowed as the mortgage was not directly used to purchase, repair or improve the property ?

Thanks.
 
No. You can only offset interest on loans used to purchase/renovate a rental property against rental income. If you released equity for other purposes then that does not count.
 
So none of mortgage qualifies, not even an amount equal to the original mortgage ?
 
Interest on whatever mortgage amount used to purchase/renovate the property was outstanding at the time that it was converted from PPR to investment can be set against rental income.
 
Just remember to register with PRTB in order to claim Interest Relief as a deduction against Rental Income
 
My situation is not as complex as Noe's. I took out a mortgage on my home (to purchase an investment abroad). This home here is now rented out. Can I offset interest payments against the rental income?
 
Doubt it - as you didn't borrow the (remortgage) money on your home in order to purchase or renovate that home. Don't know about offsetting rental from the investment abroad against mortgage interest though...


Sprite
 
WaterSprite said:
Doubt it - as you didn't borrow the (remortgage) money on your home in order to purchase or renovate that home.
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That's my understanding too.
Don't know about offsetting rental from the investment abroad against mortgage interest though...
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Didn't think that this was possible.

But I am not a tax expert.
 
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