Interest on remortgage of buy to let

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    Interest on remortgage of buy to let

    Can anyone confirm whether for 2017 return if interest and associated legal/remortgage fees on the additional advance should be disallowed or restricted on a pro -rata basis if the advance is not "wholly and exclusively" used for the the property

    It doesn't matter what the mortgage was used for, it's the loan that's part of the business and the interest is allowable (subject to the new restrictions going forward).

    Interest on the additional lending is only allowed up to the point that the loan value equals the total value of the asset when it became part of the letting business.
    So if the property was acquired a while ago for £100,000 (say with an initial mortgage of £60,000), only BTL lending to a maximum of £100,000 in total is ever allowed, if the total mortgage after the new borrowing is more than £100,000, the interest needs to be apportioned.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


      Thanks very much for this I applied the original purchase price (2003) and added in the 2015 Lease Extension and Capital Improvements both of which were funded from the new advance. I then compared this uplifted capital value against the new total borrowings (including the additional remortgaged amount) The articles I read were not clear on whether Capital Value approach could still be used....


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