Borrowing against own home to fund Ltd company - interest fully tax deductible?

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    Borrowing against own home to fund Ltd company - interest fully tax deductible?

    A variation on a question I asked a couple of years ago (here). In that case I was looking at mortgaging my own home to fund the purchase of a commercial property. In the end I didn't do that. I got a commercial mortgage secured against the commercial property.

    The situation now -
    1. My own home remains unencumbered. When borrowing is cheap I tend to think this is a bit of a waste of equity.
    2. I am interested in buying more property, but for any further purchases I would probably use a Ltd. I think I have just about maxed out my tax mitigation options as an individual.

    If I were to borrow against my PPR to buy a commercial property in my own name it seems clear to me that the mortgage interest would be tax deductible. Can I do similar using a Ltd company? My idea is this -

    Borrow against my PPR
    Lend the released equity to my Ltd. via a Director's loan
    Ltd pays me interest at the same rate as the bank charges me
    I deduct mortgage interest to reduce my taxable income from it to zero.

    This would seem (on the face of it) preferable to the Ltd. company taking out the mortgage, since deals are better for individual homeowners than for companies.
    There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

    Companies are allowed to deduct loan interest as an operating expense and reduce their annual profit and tax.


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