tax question on mortgage fees + broker fees

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    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).


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