tax question on mortgage fees + broker fees

  • Filter
  • Time
  • Show
Clear All
new posts

    tax question on mortgage fees + broker fees

    Hi All.,

    hoping someone can shed some light on this matter. I am getting conflicting views from various accountants:

    1. I did a remortgage for a BTL.
    2. Broker charged me £700 and product fees were £1795.


    1. Are both of above costs fully offset againt rental income?
    2. Does the 75% tax relief rule apply to above for 18/19?
    3. Some are saying above can only be claimed against CGT when I sell the property??

    Please share your views.

    1 - No (see 2)
    2 - They are finance costs and subject to the 20% restriction (with the transitional adjustment). That's only an issue if you're a higher rate tax payer (or the new calculation makes you one), otherwise the net result is the same as it would have been before.
    3 - "Some" are not correct, these are funding charges and are operating costs; they don't relate to the value of the property, any gain on that value or tax on that gain.

    If you are not accounting on a cash basis, the fees should properly be amortised over the life of the mortgage.
    I don't know anyone who actually does this.
    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).


    Latest Activity


    • Reply to Could we be more tax efficient!
      by AndrewDod
      You probably are not missing much obvious - pay the tax....

      Boiler servicing, tax software perhaps, maybe take the opportunity to fix stuff as you go otherwise you may end up with large expenses at the end with nothing to claim against. Tenant advertising, deposit protection fees, tenancy...
      09-12-2019, 20:01 PM
    • Could we be more tax efficient!
      by bobcat
      Hi all,

      We are currently completing the annual tax return for my wife and just wondering whether we could be more tax efficient! We no longer have any loans on the properties or major replacements planned so our tax payable is more than previous years. I don't mind paying tax but am wondering...
      09-12-2019, 17:40 PM
    • Reply to Could we be more tax efficient!
      by JK0
      I'd definitely claim the mileage. I believe it's 45p per mile, so worth claming.

      Are you both putting the maximum into your pensions?
      09-12-2019, 19:41 PM
    • Reply to PPR question
      by Gordon999
      If you only owned one property during 2012-2014, you were paying the council tax bill and it was not rented out , I think you can safely claim ppr for that initial period.
      09-12-2019, 14:20 PM
    • PPR question
      by Pamgioberti

      I am looking for a little advice.

      I purchased a run down home to live in back im 2012, I spent my time between there and my parents as I was doing it up.

      My father fell ill at this time and work slowed down, he passed away and I had to stay with my disabled...
      09-12-2019, 01:53 AM
    • Reply to PPR question
      by Pamgioberti
      Thank you. Nothing apart from the fact it was a normal mortgage and changed to a buy to let when it was rented out. I was living with my parents at the time and was very excited to get my first home. I would have moved my mother in that house but it wasnt big enough.

      I guess it's difficult...
      09-12-2019, 14:15 PM
    • Reply to PPR question
      by jpkeates
      It becomes 9 months for properties disposed of after that point.
      09-12-2019, 13:51 PM
    • Reply to PPR question
      by theartfullodger
      Think 18 month compo ends 05/04/2020....
      09-12-2019, 13:25 PM
    • Reply to PPR question
      by jpkeates
      You either lived there or you didn't.
      It's a matter of fact, rather than anything we can try and reason through.

      I think, in your case, I'd be tempted to claim a short initial residence, while you were doing it up and before you moved in with your mother first time.
      That, at...
      09-12-2019, 12:00 PM
    • Reply to PPR question
      by theartfullodger
      Sorry to read of your losses.

      What evidence do you have of your intention to live there - eg putting your then-current home up for sale and/or giving notice if rented?
      09-12-2019, 11:33 AM