7:09 AM, 23rd April 2021, About 6 months ago 6
Is it illegal to deduct mortgage interest on someone else’s mortgage, or have I been badly advised? An experienced and mature tax adviser suggested that my unmarried partner should gift me 1% ownership of her HMO into a bare trust, in order that I may legitimately deduct all the interest on the HMO’s mortgage with no SDLT on the 1% gift.
We jointly run a small portfolio, with some houses owned in her name and others jointly. The HMO was bought in her name only, and remains solely in her name at the Land Registry; the HMO mortgage is solely in her name too. All the HMO’s revenue accrues to me.
I was advised that the 1% bare trust gave me the basis for deducting 100% of the mortgage interest.
Is this legit? Aggressive tax tactics are not our style, but our adviser assured us it was an established move. We’ve done it for 5+ years. I worry that HMRC might disagree. If they did, presumably the penalty rises as time goes by.
I’d be grateful if any suitably qualified readers on here would give their view. If it’s not legit, what next?
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Advice and implementation provided by a practising Barrister-At-Law with £10,000,000 of Professional Indemnity InsuranceBook Now
Previous ArticleBuy to Let in Scotland for south of the border newbie?
Next ArticleNew Class MA Is a Game Changer!
|“Account”||means an account required to access and/or use certain areas and features of Our Site;|
|“Cookie”||means a small text file placed on your computer or device by Our Site when you visit certain parts of Our Site and/or when you use certain features of Our Site. Details of the Cookies used by Our Site are set out in section 13, below;|
|“Cookie Law”||means the relevant parts of the Privacy and Electronic Communications (EC Directive) Regulations 2003;|
|“personal data”||means any and all data that relates to an identifiable person who can be directly or indirectly identified from that data. In this case, it means personal data that you give to Us via Our Site. This definition shall, where applicable, incorporate the definitions provided in the EU Regulation 2016/679 – the General Data Protection Regulation (“GDPR”); and|
|“We/Us/Our”||Means Property118 Ltd , a limited company registered in England under company number 10295964, whose registered address is 1st Floor, Woburn House, 84 St Benedicts Street, Norwich, NR2 4AB.|
|Name of Cookie||Purpose||Strictly Necessary|
|JSESSIONID||Used only to collect performance data, with any identifiable data obfuscated||No|
|__cfduid||This cookie is strictly necessary for Cloudflare's security features and cannot be turned off.||Yes|
|Name of Cookie||First / Third Party||Provider||Purpose|
|__utma, __utmb, __utmc, __utmt, __utmz||First||Helps to understand how their visitors engage with our website|
|_fbp||First||Helps to understand how their visitors engage with our website|