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BIM457000: Where are we now?

Shared from Tax Insider: BIM457000: Where are we now?
By Mark McLaughlin, December 2023

Mark McLaughlin looks at interest relief for landlords, and HMRC’s current view on additional funds borrowed against the value of residential lettings.   

It is difficult enough for landlords to navigate through complex tax legislation and pay the ‘right’ amount of tax without HM Revenue and Customs (HMRC) guidance apparently contradicting itself. But that seems to be the current position. 

Remortgaging: Interest relief  

For example, the tax legislation states that a deduction from rental profits is allowable for expenses incurred ‘wholly and exclusively’ for the purposes of the business. This short and general provision has resulted in uncertainty and case law disputes between taxpayers and HMRC over the years.  

Interest relief can be given for finance costs (e.g., mortgage or overdraft interest) associated with

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