Claiming Interest on SA

[ssingh]

Hiya,

I currently have a BTL on which I have no mortgage.
I want to re-mortgage this property (Interest Only) and buy another BTL. I will also be taking out another BTL mortgage on the new property.
My query is, on my SA can I claim back the Interest for both properties against my rental income?
Any advice would be much appreciated.

[King_Maker]

What is the purpose of the 2nd BTL mortgage?

[MisterB]

if both properties have btl mortgages and are rented out, then yes. if this is a scam to rent one and live in the other then no!

[ssingh]

Hi,

Thanks for your reply. Just for clarification. I am trying to release capital in my first BTL (which is fully paid up) and use the money as a deposit to buy a second BTL.
If I give you some example figures:
1. First BTL - on this I take out a BTL mortgage for say £50,000 to release capital.
2. I use the £50,000 as a deposit on a second BTL taking out another BTL mortgage on this second property for the balance.
I know have two BTL mortgages, on the first and second properties.
Both will remain as rental properties.

[jpkeates]

Both should be allowable.

There is a limit to the mortgage interest that can be claimed on the existing property, which is limited to a mortgage on the original value when brought in to the business.
If it cost £100k a few years ago and you mortgage it at £150k, only the first 2/3rds of the interest is allowable.

[King_Maker]

Hi,

Thanks for your reply. Just for clarification. I am trying to release capital in my first BTL (which is fully paid up) and use the money as a deposit to buy a second BTL.
If I give you some example figures:
1. First BTL - on this I take out a BTL mortgage for say £50,000 to release capital.
2. I use the £50,000 as a deposit on a second BTL taking out another BTL mortgage on this second property for the balance.
I know have two BTL mortgages, on the first and second properties.
Both will remain as rental properties.

Both should be deductible from the rental income.