Tax relief (mortgage interest and works) on holiday home

[davel]

Hi,
I have owned a holiday home for 3 years and raised the finance by taking out a mortgage splitting the mortgage between my own home and the new one.(50 / 50 split). My own home did not have a mortgage before doing this so the 2 mortgages were purely used to buy the holiday home.
I am just in the process of renting it out for the first time. During the 3 year period I have spent monies on materials for basic decoration and also for new carpets etc.
I have contacted the mortgage lender and they can easily transfer the holiday home to a buy to let mortage leaving me a standard residential mortage and a buy to let.
If I do it this way can I still get tax relief on the interest on both the mortgages or should I combine the 2 mortages into a buy to let on the one holiday home ?
Can I still claim tax relief on the decorating even though some of this has been done during the past 12 months ?
P.S. even though we have owned it for this period we have never lived in it.

Thanks in advance

Dave

[Tax Accountant]

I have my main home. Thereafter, I have also owned a holiday home for 3 years. Even though we have owned it for this period we have never lived in it

So has it been left vacant continuously throughout the whole of 3 years?

If you have used it as holiday home now and then, have you looked into possibility of nominating this as your only or main residence if this is more advantageous than your actual main residence? Any such elections have to be within 2 years of having more than one residences. You may have subsequent opportunities of being able to do so. You may also be able to make a late election if you were not previously aware of the need to do so within the time limits.

I have bought the holiday home by raising the finance on both my own home (50%) and the holiday home (50%). My own home did not have a mortgage before doing this so the 2 mortgages were purely used to buy the holiday home.
I am just in the process of renting out the holiday home for the first time.

I have contacted the mortgage lender and they can easily transfer the holiday home to a buy to let mortage leaving me a standard residential mortage on my main home and a buy to let on my holiday home.
If I do it this way can I still get tax relief on the interest on both the mortgages or should I combine the 2 mortages into a buy to let on the one holiday home ?

Whichever suits you best. You will get tax relief on both regardless of whether they are amalgamated or not.

During the 3 year period I have spent monies on materials for basic decoration and also for new carpets etc.Can I still claim tax relief on the decorating even though some of this has been done during the past 12 months ?

You could not claim for any of this unless you have actually spent the money specifically for making it ready for letting.

Ramnik

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[davel]

Great thanks for that Ramnik.

I should have told you that the holiday home is 4 hours drive to the coast from our main in land residence.

We bought it with the intention of using it 3 or 4 times a year for holidays for ourselves but due to family commitments have not had a holiday on the coast for the past few years.

I will continue with the split and just transfer the holiday home to a buy to let mortgage.

Many thanks again for this.

Dave

[Tax Accountant]

Great thanks for that Ramnik.

I should have told you that the holiday home is 4 hours drive to the coast from our main in land residence.

We bought it with the intention of using it 3 or 4 times a year for holidays for ourselves but due to family commitments have not had a holiday on the coast for the past few years.

I will continue with the split and just transfer the holiday home to a buy to let mortgage.

Many thanks again for this.

Dave

You are welcome.

But still look into the possibility of nominating this as your only or main residence if this is more advantageous than your actual main residence.

Ramnik