I have two properties; one house (my residence) and one buy to let flat. Mortgage on the house is £200k, mortgage on the flat is £136k.
As is often the way with these things....the informal advice I have received suggests that I quote the maximum mortgage cost whichever property that is on - when submitting my tax claim. Figures would be £7000 on the house versus £3800 on the flat - both interest only of course.
I have my doubts about this as the rules state that one can claim mortgage interest relief when the a mortgage is raised for the sole purpose of purchasing a letting property.
The difference is substantial and will change my small profit into loss (and hence no tax to pay) on the flat.
NB When I bought the house I increased the mortgage on the flat to release £50k to buy the house.
Any help appreciated - thanks.