Updating post from Reddit.
Hello,
I remortgaged my residential to fund my BTL deposit (released 80k and paid a 56k deposit)
Can I claim the interest on the 56k on the residential mortgage in addition to the interest on the BTL mortgage?
Thanks
No but I think if you buy via a limited company you can fund the purchase with that money as a directors loan then please correct me if I am wrong you can take that money out tax free to repay yourself from the limited company.
If you loan it to your own (or any) company, you can get it back without paying additional tax. It's not strictly speaking 'tax free' because you would have paid the appropriate tax for it at some point (when buying the original house for example). I know that's borderline pedantry, but someone might read it as a way to claim the originally paid tax back or something...:)
You CAN claim interest on the loan you made to the company, too, which might offset some of the interest on the mortgage (though that interest is then taxable, as it's income).
But for OP's sake, no you cannot claim the interest back on the residential mortgage.
Oh that is good to know I didn't realise you can charge interest on the loan you made. Very interesting point.
But you’ll have to pay stamp duty by moving the property into a company which is very likely to outweigh any tax savings
Agreed
CGT / stamp duty going in and sometimes ATED annually if not let out/below the thresholds
Borrowing is usually more expensive for the LTD too
And if you want post property sale cash out of the co it is usually a dividend over and above repayment of directors loan
LTD is not all it is cracked up to be by the tiktok property “gurus”
No
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