TRS on equity release

O

onway

Registered User
Messages
302
We recently got €75,000 in equity release ( or is that a top-up???) from mortgage company. Am I correct in thinking that I cannot claim TRS on this money if I use it for the purpose of building another house ??
 
But you may be able to offset mortgage interest on an investment property (if that what the second property will be) against rental income.

That could depend on how the transaction is structured, i.e. I think you need a separate mortgage for the investment property.
 
CCOVICH said:
that could depend on how the transaction is structured, i.e. I think you need a separate mortgage for the investment property.
Click to expand...

Other advice on this topic says you don't need a seperate mortgage????
 
onway said:
Am I correct in thinking that I cannot claim TRS on this money if I use it for the purpose of building another house ??
Click to expand...
You can if you move into the new house as your PPR.
 
CCOVICH said:
Where? I would like to read this myself.
Click to expand...

Sorry CCOVICH, I'm not great with using the thread references but if you look up Builders Mortgage versus equity Release, the information is in that thread.

To make myself clear, it seems possible to release equity on one's home in order to buy an investment property (mortgage is held on PPR). TRS is on amount relating to PPR only, while interest on monies borrowed to secure investment property are treated as expense against rental income.
 
On TRS you can claim if the purpose is 'purchase, repair, development or upkeep' of PPR. That also applies to 'top ups'.

If you are borrowing for an investment property, its usually better to structure the borrowings against that property, though if done by way of equity release on PPR that interest should also be deductible against the Rental Income.

The Revenue Guide to Rental Income - which Revenue will say is only a guide - only makes metion of monies borrowed and does not specify that this is the specific property or otherwise.

[The only reason I mention this is that there is some doubt about interpretation ... as a UK tax case saw a situation where the taxpayer was able to deduct the interest on borrowings secured against an investment property regardless of the purpose]
 
You must log in or register to reply here.
Back
Top