I'm looking at releasing £150,000 in equity from my main residence to establish a buy-to-let limited company. Is tax relief available on this?
Arthur Weller replies:
Tax relief is available for the interest payable to your lender when you use the borrowed money to lend to your personal company, under the 'allowable interest' rules. If you look at the self-assessment SA101 form (additional information) page AI 2, there is a Box 5 (second one) called 'Qualifying loan interest payable in the year' where you can enter the figure for the interest paid to your lender. This is deducted from your taxable income, so that you pay tax on the net amount.