BTL Early Repayment Charge Allowable Expense?
10:00 AM, 25th November 2016, 9 years ago
13
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Apologies if this question has already asked but I am struggling to find clarity on the .Gov website.
I am considering remortgaging a buy to let property which is currently still within its fixed term, doing so will incur an early repayment charge of £4k. Does anybody know if this early repayment fee is an allowable expense…note the early repayment charge will be incurred purely for refinancing purposes and will continue to be let with its current tenants.
Thanks.
Gary
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Member Since February 2011 - Comments: 3453 - Articles: 286
10:03 AM, 25th November 2016, About 9 years ago
Hi Gary,
I have checked with Mark as he has done this regularly before and it is an allowable finance cost.
However you need to get this in before the section 24 rule changes in April.
Member Since July 2015 - Comments: 13
10:06 AM, 25th November 2016, About 9 years ago
Reply to the comment left by “Neil Patterson” at “25/11/2016 – 10:03“:
Thanks for the reply Neil, very much appreciated!
Comments: 359
4:32 PM, 25th November 2016, About 9 years ago
what about if you pay an early redemption fee while clearing the mortgage early?
Member Since July 2013 - Comments: 1434
6:18 PM, 26th November 2016, About 9 years ago
Reply to the comment left by “D D” at “25/11/2016 – 16:32“:
My understanding, from a conversation with an accountant a couple of years ago, is it is what you do not why you do it that counts for tax purposes.
Therefore if you incur a finance charge, then it goes into the tax calculation.
Member Since February 2017 - Comments: 5
8:19 PM, 20th February 2017, About 9 years ago
Reply to the comment left by “Neil Patterson” at “25/11/2016 – 10:03“:
Hi Neil
Are BTL fixed term mortgage early repayment fees still an allowable expense against tax?
How have the Section 24 changes affected this?
Thank you
Tina
Member Since January 2011 - Comments: 12196 - Articles: 1397
8:26 PM, 20th February 2017, About 9 years ago
Reply to the comment left by “Tina O’Connor” at “20/02/2017 – 20:19“:
Section 24 affects all finance costs including early repayment charges
.
Member Since February 2017 - Comments: 5
7:28 AM, 21st February 2017, About 9 years ago
Hi Mark
Thank you for responding.
Are you saying that the early repayment charge is no longer an allowable expense?
Thank you
Tina
Member Since July 2013 - Comments: 1434
8:21 AM, 21st February 2017, About 9 years ago
Reply to the comment left by “Tina O’Connor” at “21/02/2017 – 07:28“:
It is an allowable expense.
No change this tax year.
Next tax year it will be treated differently under S24.
Member Since January 2011 - Comments: 12196 - Articles: 1397
8:26 AM, 21st February 2017, About 9 years ago
Reply to the comment left by “Michael Barnes” at “21/02/2017 – 08:21“:
I concur, next year being post April 5th 2017 of course, the next Tax Year.
.
Member Since February 2017 - Comments: 5
12:37 PM, 21st February 2017, About 9 years ago
Reply to the comment left by “Michael Barnes” at “21/02/2017 – 08:21“:
Hi Michael
Thank you very much for your comment.
Would you be able to recommend me an accountant who holds this view?
Thank you
Tina