Need Help Completing Uk Self Cert Tax Return

[slippery when wet]

Helo All.

I am after some advice and hope that you can help and hopefully shed some light on my tax query.

I presently live in the UK with my Thai wife and last year we remortgaged a flat /appartment to raise the deposit to purchase a further property. As both properties are currently being let out I was wondering if when I come to completing the self cert a tax return I could put these costs (initial deposits on both properties and solicitors fees) against tax.

If this is possible it would be a substantial amount about £40k

Any advice would be greatly appreciated.

Thank you.

[fletchsmile]

My UK taxknowledge is a little rusty, but from what I remember, as the deposits are capital in nature they wouldn't be deductible.

For the solicitors fees: if they were in connection with buying the property, they would also be of a capital nature so not deductible either. If they related to the actual renting out, such as lease agreements, rather than buying the property they could be deductible.

Would advise you to check tho'. These days there's quite a lot of help on their website.

http://www.hmrc.gov.uk/

just type in what you are looking for in the search box eg property letting deductible expenses. Works very similar to google, and you'll come across their leaflets info etc.

BTW The interest paid on the loans could be deductible.

Edited October 6, 2007 by fletchthai68

[briley]

But only the interest paid on any loan. If the mortgage payment includes any capital repayment then that must not be offset against tax

Inland Revenue are very keen on that point at the moment.

[fletchsmile]

But only the interest paid on any loan. If the mortgage payment includes any capital repayment then that must not be offset against tax

Inland Revenue are very keen on that point at the moment.

Yep. Only the interest element. BTW even the interest element is not automatic, and there are some circumstances it is disallowed. eg interest loans on your own primary residence are not. So if someone remortgaged their own home while still living in it (i.e main residence) to pay for another property, that could probably be disallowable, but should check.

Thread is duplicated in general section

Edited October 7, 2007 by fletchthai68