Mortgage product fees - Spread the cost over the mortgage term or one off expense?

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    Mortgage product fees - Spread the cost over the mortgage term or one off expense?

    Hi everyone,

    I know this question has come up here a few times but I was curios if I can claim the mortgage product fee in the financial year that has occurred rather than spread this cost over the mortgage term.

    Thank you

    #2
    You can, but it is probably not correct.

    However, if the tax involved is not significant, HMRC are unlikely to be that concerned.

    Comment


      #3
      Are you talking about the Mortgage Completion Fee or Product Booking Fee , if the former I understand it the Completion Fees paid as a lump sum cannot be claimed against rental income whilst the latter certainly can be.

      I too will be interested to learn if indeed anyone has successfully claimed such payments.

      Comment


        #4
        King_Maker

        Thank you for the prompt answer. The fee is "only" £999 so no a very high product fee.

        Comment


          #5
          There are many (more than 10..) taxes a landlord may have to pay: Read this book & save money - on at least one of them....

          http://www.amazon.co.uk/How-Save-Pro.../dp/1907302859
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


            #6
            Originally posted by loanarranger View Post
            Are you talking about the Mortgage Completion Fee or Product Booking Fee , if the former I understand it the Completion Fees paid as a lump sum cannot be claimed against rental income whilst the latter certainly can be.

            I too will be interested to learn if indeed anyone has successfully claimed such payments.
            I am not aware of any reason why a "completion" fee is not tax deductibe - if it is payable in respect of a mortgage. Do you have reference(s) that support a non-deduction?

            Comment


              #7
              Originally posted by FirstimeLandlord View Post
              King_Maker

              Thank you for the prompt answer. The fee is "only" £999 so no a very high product fee.
              The tax relief is essentially one of timing - unless your Income Tax rates are different in the relevant years.

              Comment


                #8
                I am only mentioning what a chartered accountant had said to a client: I agree that this is strange given that a fee which is amortised on the capital debt is used each year against the rental. I try to stick to lending and what I know to be correct , if anything different I always pleased to be corrected.

                Comment


                  #9
                  He/she is incorrect.

                  Section 58 ITTOIA 2005 specifically allows an Income Tax deduction for the "incidental costs of obtaining finance".

                  Comment


                    #10
                    Regarding accounting for mortgage fees in the year they are incurred rather than amortising them of the mortgage's term: My understanding is that whilst it is not correct it should be acceptable provided that the fees are small in comparison to the mortgage's interests.

                    Originally posted by King_Maker View Post
                    He/she is incorrect.

                    Section 58 ITTOIA 2005 specifically allows an Income Tax deduction for the "incidental costs of obtaining finance".
                    Indeed.

                    Comment


                      #11
                      Thank you for all the answers!!!

                      Comment

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