tax question on mortgage fees + broker fees

[tommys]

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.

Questions:

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.

[jpkeates]

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.