Deducting Mortgage Interest from before let?

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    Deducting Mortgage Interest from before let?

    Hi everyone,

    I'm relatively new to being a landlord and am in the process of completing my first tax return. I bought my house with a residential mortgage but later rented it out with a consent to let. Prior to renting it, it was vacant for a few months and during that time I did some repairs and gave it a fresh lick of paint etc ready for renting. I'm just wondering for what period I can deduct the mortgage interest? Is it just the portion of interest since it was let for the first time, the interest from when it became empty, or all of the interest charged from the beginning of the tax year that I began renting?

    Any help would be much appreciated, I can't seem to find the answer anywhere

    Thanks!

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  • Reply to Caught out by changes to Capital Gains Tax
    by reluctantlandlord1976
    Hi Andrew
    First of all I've got an initial appointment to speak to an accountant on Friday!

    Can I just check where you write ' ...at death 1/6th of the value of the whole would have been deemed to pass to you for CGT purposes as the survivors would share the whole'.

    Does...
    08-12-2021, 18:02 PM
  • Caught out by changes to Capital Gains Tax
    by reluctantlandlord1976
    I appreciate 'ignorance' is no excuse, however there are some mitigating factors, i.e. due to illness etc.

    1. Previous family home rented out - terrible tenants - left owing rent, bad repairs etc. [usual story for some] subsequently property not let for 2 years for a number of reasons while...
    06-12-2021, 13:51 PM
  • Reply to Caught out by changes to Capital Gains Tax
    by jpkeates
    Even if probate wasn't mandatory, it would probably have been useful.
    08-12-2021, 13:44 PM
  • Reply to Caught out by changes to Capital Gains Tax
    by AndrewDod
    Yes this would be the case if it was jointly owned (not as tenants in common). The situation would be that at death 1/6th of the value of the whole would have been deemed to pass to you (for CGT purposes), as the survivors would share the whole.

    So for the 3 periods you would be taken...
    08-12-2021, 12:51 PM
  • Reply to Caught out by changes to Capital Gains Tax
    by reluctantlandlord1976
    jpkeates
    There was no estate as such, property jointly owned - they were both retired at time of purchase living on small pensions, hence I bought with them so they could stay in the home they'd been renting from council from early 1950s to March 1982 at time of purchase. And I paid for the initial...
    08-12-2021, 10:50 AM
  • Reply to Caught out by changes to Capital Gains Tax
    by jpkeates
    I don't know the historic thresholds, but it's bizarre that there's no probate for both of your parents, their estate has to be tiny for that to be possible nowadays.
    It's probably too late for HMRC to do anything about that, but that process sets the values for CGT calculations later on, so it's...
    08-12-2021, 10:28 AM
  • Reply to Caught out by changes to Capital Gains Tax
    by reluctantlandlord1976
    Morning Andrew
    Thanks for your response early this morning and clarifying I have to make three separate calculations [the split wasn't clear on the CGT calculator].
    I understand the query on the value but this is an ex council house on a council estate [I feel I have to defend it here as...
    08-12-2021, 08:45 AM
  • Reply to Caught out by changes to Capital Gains Tax
    by AndrewDod
    As gordon indicates you need to consider it in three entirely separate parts, each have their own gain and calculation --

    The part YOU owned before Death 1
    The part YOU owned between Death 1 and Death 2
    The part you owned after Death 2

    Based on the values you give...
    08-12-2021, 05:52 AM
  • Reply to Caught out by changes to Capital Gains Tax
    by reluctantlandlord1976
    Thank you Gordon, didn't see your response this afternoon. I will look at this with fresh eyes tomorrow as it's late now.
    I've put some figures in my reply to a post just now but answers below to your questions.

    a] £80k Jan 2021 sale price.
    b] As property purchased before...
    08-12-2021, 00:55 AM
  • Reply to Caught out by changes to Capital Gains Tax
    by reluctantlandlord1976
    Andrew, apologies only just seen your post [was it awaiting approval did you say?] answers are:

    Purchased March 1982 as joint tenancy - so equal split of 33 1/3% each party
    Parent 2 died September 2007 - as joint tenancy I inherited their share - so at this point I own 100% of property...
    08-12-2021, 00:41 AM
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