Hi all
I'm pretty sure that as you lose PPR status and your property becomes an investment property, thus you're liable for CGT, stamp duty clawbacks etc because suddenly it is deemed to be an investment property, then you are entitled NOT to mortgage interest relief (which some people still tend to continue to call it) but to claim the interest on the original mortgage, against your rental income.
In fairness, it's either an investment property or not, even the Revenue don't try to have it both ways!!
What you cannot do is raise further finance on that investment property, use it to extend, renovate, your new PPR and then claim the interest on the new borrowings against the rental income.
BTW, for what it's worth, I wouldn't go to court on the basis of what you're told by anyone on the phone working for the Revenue. They are not necessarily all well informed and up to date.
2 cases in point -
1. A few years ago when lots of tax reliefs were standard rated, I submitted a MED 1 form and was only refunded 20%, when I phoned up, I was told over and over that "all reliefs are now standard rated" - FALSE, Medical expenses are still claimed at the marginal rate of tax (it even says so on the form)
2. I recently submitted a 2007 tax return and received 5 incorrect assessments.
Given that I was claiming reliefs, you can imagine my surprise when the first assessment suggested I owed them Eur22k!!
It took me 3 months of revised assessments to get one approximating what I knew to be correct (still a few hundred euro off but that's for another day)
Shakespeare