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Commercial Property Interest relief

S

Samuel5

New Member
Hi all

I am looking to purchase a commercial property to rent it to a business I have investment in.
I understand that mortgage interest for commercial property is still fully tax deductible unlike residential property.

However, I am remorgaging two other residential properties I own to finance this purchase and be down as a cash buyer.
Because the mortgages will be against the residential properties and not the commercial property can I still claim the interest relief?

My accountant said because I am using the mortgages to fund the commercial property it will be ok but I want to double check.

Thanks

Sam
 
A

AA Accountants

New Member
Premium Member
Hi all

I am looking to purchase a commercial property to rent it to a business I have investment in.
I understand that mortgage interest for commercial property is still fully tax deductible unlike residential property.

However, I am remorgaging two other residential properties I own to finance this purchase and be down as a cash buyer.
Because the mortgages will be against the residential properties and not the commercial property can I still claim the interest relief?

My accountant said because I am using the mortgages to fund the commercial property it will be ok but I want to double check.

Thanks

Sam
Hi Sam

Yes, you can still claim the mortgage interest in its entirety. By this I mean the total amount that you re-mortgaged to fund the purchase of the commercial property.

The expense is wholly and exclusively for the purpose of the trade - in your case for the purchase of the commercial property.

If you would like to read up on this then please see the following:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim37000

I hope this helps.

Shaz
www.aa-accountants.co.uk
 
Nicholas Wallwork

Nicholas Wallwork

Editor-in-Chief
Staff member
Premium Member
Great reply Shaz thank you!


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