2 properties

[Moodyman]

Hello,

Hope you can help.

I have two properties - one renting (property A), the other habiting (property B).

I've never lived in property A which is now mortgage-free.

Bought property B early this year with a sizeable interest-only mortgage.

Have been using the rent from property A to pay the mortgage on property B. Is this acceptable under the tax rules or do I have to move the mortgage to property A to benefit from offsetting (rental income against interest payments).

Thanks

[TaxationPete]

Do you mean that you have been deducting the interest from the rental income to establish the profit. Regards Peter

[Moodyman]

No.

In the last couple of months, I've used the rent from the letting property to pay my domestic mortgage.

My letting property is mortgage-free, whereas my domestic property has an interest-only mortgage.

I was wondering whether this arrangement is acceptable under the HMRC rules or whether I would be better off re-mortgaging my letting property and using the proceeds to pay off my domestic mortgage - thereby, using the rental income to offset against the interest payments.