Question:
Before I set out on my whole buy to let venture are you able to confirm that the following is possible: a) I am able to raise through a loan the capital to purchase a buy to let from my residential property? b) I am able to claim tax relief on this load against my earnings on the rental property.
Arthur Weller Replies:
If you look on
http://www.hmrc.gov.uk/manuals/bimmanual/BIM45685.htm you can see that as long as you use the borrowed money only for genuine business purposes, i.e. to buy the property to rent out, then all the interest you have to pay your lender is an allowable business expense that you can offset against your rental income for tax purposes. The fact that you borrow against your residential property doesn't matter - what is important is that you are using the funds for your business.
