Mortgage Fees

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    Mortgage Fees

    Tax return 2020/2021
    I remortgaged a BTL back in October 2020. I understand that my tax reduction is calculated at 20% (lower of finance costs or property profit or adjusted total income) to get to my final income tax.
    Unsure how to treat the arrangement fees relating to the BTL remortgage and whether or not they can be claimed in the tax return. The fees are as follows:
    1. Fees to take out mortgage £1499 and added to the loan
    2. Solicitors’ fees - £177
    3. Bank charges - £35
    My questions are:
    1. Is there a rule regarding loan arrangement fees?
    2. Is it similar on the lines of interest i.e. 20% tax relief?
    3. Can arrangement fees be fully claimed as allowed expense from the rental income?
    4. If these costs are allowed, where do I include them in the tax return?
    Thanks.

    #2
    1 - Yes, they're treated the same as interest.
    2 - All finance costs have the same restriction.
    3 - No.
    4 - There's a separate box for finance costs. Last year it was box 44 on the property details sheet.
    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).

    Comment


      #3
      JPKeates great. Thanks for your prompt reply, I was just checking that I wasn't missing anything.

      Comment

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