UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
If the loan for the deposit has been taken out in your name only, secured on a property which is owned in your sole name only you can claim the interest against your half share of the rental income.
Ok, so just to recap the first part, can I actually (from eyes of HMRC Inspector's rule book), claim the interst part on the additional loan of £40k I got from my residential house me and my family live in. My current residential mortgage having been increased from £30k to £70k ie paying one mortgage payment.
Yes because the purpose of the additional loan was for the purchase of the buy to let property
Ok, great, I wanted to verify this from earlier advice received elsewhere. Now the second part, again to just confirm - Can I only show the 100% interest amount I paid (from start of BTL in Nov 09 to end of March 2009, around £1200 as interest part of repayment mortgage - on my return meaning my wife who is jointly owning the BTL property cannot show half of the same interest on additional loan, beacuse the £40 was paid to me as I am the sole owner of residential property.
Just to conclude this, can my partner, on her own tax return, show the 50% profits/ loss etc,can she include the BTL Mortgage Interest relief, but she can not add to this her half of £40k interest paid towards BTL Mort because I have already included 100% of interest relief on my return. Finally, to put my mind at rest, please can you cofirm if you are registered charted account, if not your account status. Thanks
Sorry for repeated long question, just need to put my mind at rest - your reply is very much apprechated.
sorry for the delay
please bear with me
ok, no problem.
Hi sorry about that - telephone call !
Just to recap/ summarise: you confirm I only show 100% the interest part of £40k ie. £1200 from start of BTL in Oct 09 to end of March 2010 on my return - my wife cannot show half of £40k interest on her tax return beacuse residential property on which I got this loan was in my sole name. So can I then show this on my return as the 100% ie £1200
Yes to confirm your wife will not be able to claim half the interest on the loan you took out as a deposit for the BTL property as the loan is in your sole name secured on a property owned solely by yourself. Therefore you claim 100% of the loan interest on this loan against your half share of the rental income, on your tax return.
And dont forget to confirm (sorry) if your are registered chartered account or tax specialist so I can be confident when filling our reuturns based on info I have supplied - first time completing returns fo rboth of us.
You can claim the whole of the loan interest from the date the loan commenced as the purpose was to purchase the BTL property even if the letting started at a later date.
I am not a chartered acountant but a tax consultant. I have been working in taxation since 1976 - 10 years Inland Revenue, and for various firms of chartered accountants and tax consultants since then. I also have my own tax consultancy business and have had many clients for whom I have prepared letting accounts and tax returns.
Can I assume we can include usual BTL Morgage Interest relief in addition to me showing the 100% interest on my additional loan, on our return. rWishing you a peaceful, joyful and happy Xmas and a Happy New Year. Thanks for the fantastic advice and time.
Yes the BTL mortgage interest can be claimed 50:50 each as the mortgage is in joint names with your wife
Merry Xmas to you both too
Ok, a big thank you and once again Have a good Xmas break (hope you have it even though you may still be helping others online). Kind Regard.
Thank you and take care
Very sorry, forgot to ask a question about repair cost on BTL - ok if you cannot answer, but fantastic if you can...Soon after buying BTL property we replaced worn out carpets with laminated flooring in the house at cost of £1500 - did this before first tenants moved in - question is can I (once again legally from HMRC point of view), put this on our return as repairs etc ? I am claiming 10% wear and Tear allowance as well as its furnished proeprty. Many, many thanks.
Some rooms did not have any carpets, just hard tiled concrete floor, i think.
Unfortunately, you can't claim both. The 10% W&T allowance includes floor coverings. You have to decide from the outset whether you claim the 10% W&T allowance or replacement (not initial purchase) furnishings - you can't swap the basis from year to year so you have to adhere to the same basis throughout. In the long term the 10% W&T is usually more beneficial.
OK, can I possibly include the cost replacement laminate flooring as capital expedniture ie when I sell BTL House I can show when working out sale profit?
I would say that laminate floor covering is treated in the same way as carpet.
Ok, I thought I could show cost of laminate flooring (to replace worn out carpet) as repairs on our return - or could I actualy show it as repair cost on annual reutrn.
Your answer will conclude this Chat.
As I say floor coverings ie carpet and laminate flooring are treated as furnishings and therefore come under the 10% wear & tear allowance if you replace them. If you repaired the existing carpet or laminate flooring then I would say yes you could claim the cost of that repair separately as you are not replacing the item.
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