Mortgage fees and redemption penalties

[Paola]

Hello there,
I was wondering if you could you help.

I had a BTL mortgage on a property which i had to move into and became my residential home. While transferringg the btl mortgage into a residential mortgage i had to pay rdemption fees and mortgage fees. Are any of these tax eductible?

May thanks in advance.
Paola

[Phlash]

The purpose of you incurring those fees was for your own personal gain, not the lettings business'.

Think of it this way - If someone else owned the business (the lettings), would they pay for you to move into the house to enjoy it?

Answer: No.

The tax answer is similar - the expense was not for the purpose of the trade, it had nothing to do with the business.

If however, you had incurred exit fees, in order to refinance the business and the business then let somewhere else, then the costs would have been for the purpose of the trade.

What you can deduct, is the balance of your unamortised arrangement fees from when you first took out the BTL mortgage. Of course, that is if you haven't already claimed those expenses, which many people tend to do up front by mistake.

[Paola]

Thank you. I appreciate your time and your comments.
:-)