House purchase

paulr

I have a new client that raised a loan 150k against her existing home residence by increasing the existing mortagage.The 150k was used to purchase a second home
which is being rented unfurnished.
My understanding is that as the finance is against the home residence no mortgage interest
relief will be available to claim as an allowance.
Has any member come across this situation and is there a potential for calculating a notional interest amount.
ps.This client did not seek advice prior to purchase.

T.C.

The £150K is for a "business" enterprise so could you not use the interest on that element of the mortgage against the property income??

paulr

thanks.

deanshepherd

Agreed. In fact, it does not matter which property is mortgaged or even the application of the funds. As long as a 'refinancing' took place then interest on a mortgage up to the value of the rental property when first let can be claimed for relief.

paulr

thanks Dean