M
Muzley
Guest
I have a property which was my Primary Principle Residence. I am about to purchase another property which will become my PPR (thereby changing to the status of the first property to an investment property).
I planned to restructure my mortgages so that I remortgage the investment property to ensure my mortgage interest will be high - the rationale being that by doing this, I can minimise the amount of rental income which is liable for tax (as this is an offsettable expense).
However, I've been advised that I can only use the interest on the current outstanding mortgage (prior to remortgaging) to offset against my rental tax liability. So for example, if my current mortgage interest is E4000 and after I remortgage, my interest goes up to E6000. However, I've been told I can only offset E4000 against rental income because the remortgage is considered a top-up.
Is this correct?
I planned to restructure my mortgages so that I remortgage the investment property to ensure my mortgage interest will be high - the rationale being that by doing this, I can minimise the amount of rental income which is liable for tax (as this is an offsettable expense).
However, I've been advised that I can only use the interest on the current outstanding mortgage (prior to remortgaging) to offset against my rental tax liability. So for example, if my current mortgage interest is E4000 and after I remortgage, my interest goes up to E6000. However, I've been told I can only offset E4000 against rental income because the remortgage is considered a top-up.
Is this correct?