Mortgage interest

[Gabriel]

We bought a buy to let property a few years ago. Last year we remortgaged in order to release some equity to use as a deposit on 2 more properties. The mortgage on the first property is now more than the original purchase price. I
have been advised that we can only claim against tax interest on the portion of the mortgage up to the original purchase price. However, someone else has advised that the remaining interest can be claimed as it is interest on a loan used to buy another property. I am confused! Can anyone advise please?

[Taxation Solutions]

Gabriel

If the additional funds borrowed were used entirely for the purpose of your rental buiness i.e. deposits for additional BTL properties, then all the loan interest paid is an allowable deduction against your rental income.

Jason
www.propertytaxation.co.uk

[Gabriel]

Thanks, Jason