BTL remortgage fees...Allowable against rental income?

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    #1

    BTL remortgage fees...Allowable against rental income?

    Hi

    I'm looking for some advice please.

    I've been renting out a property for the last three years on a residential mortgage on a consent to lease basis. The consent expired in January so I had to remortgage to a BTL mortgage. To do this I incurred the following costs:

    Solicitor fees £460
    Mortgage arrangement fee £999
    Valuation fee £270

    My question is...are all of these costs allowable against rental income? and can the total (£1729) all be claimed in the tax year they were incurred or do they need to be accrued over the term of the mortgage (22 years)

    I understand some of these costs would be capital costs if they were incurred during the original purchase of the property but this is a remortgage which had to be carried out to continue letting the property.

    Any advice would be greatly appreciated. I've spoken to three people at HMRC and can not get an accurate answer.

    thank you
    Tags: None
    #2
    All three items should qualify as the "incidental costs of finance" and thus be deductible from rental income.
    IMHO, they should be amortised over the term of the mortgage. But this may be "impractical".

    Comment

      #3
      Thank you for the reply King_Maker. I would obviously prefer to claim all the costs in the same tax year, rather than amortise over 22 years. Do you know if HMRC allow this?

      Sorry but what exactly do you mean by "impractical"?

      Thanks

      Comment

        #4
        I believe amortisation to be most in line with accounting principles...

        http://www.comfortlettings.co.uk/blo...g-on-your-btl-
        I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.

        That also means I cannot share in any profits from any decisions made!

        Comment

          #5
          Originally posted by john981 View Post
          Thank you for the reply King_Maker. I would obviously prefer to claim all the costs in the same tax year, rather than amortise over 22 years. Do you know if HMRC allow this?

          Sorry but what exactly do you mean by "impractical"?

          Thanks
          It could be that HMRC are unlikely to challenge small amounts in a single year that should have been amortised over many years.

          Comment

            #6
            Thank you very much to King_Maker and Phlash for your replies

            Comment

              #7
              You're welcome.

              Comment

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