Management Charges as an alternative to Interest Payments?Make Text Bigger
I have been the main funder of some student properties with a business partner. We have a share of profits from both income and capital appreciation. I put up the deposits for the mortgage, and I paid all the up-front refurbishment costs prior to letting.
For the last few years I have been charging each house with an interest charge for the funds I have in them at 5% and this has roughly equated to the mortgage interest rate too.
Now that we are unable to recover interest fully, I wonder if I can make a Management Charge rather than an interest charge.
Does any have any tax experience to say if this would stand up ?
The fact that I am having to declare the Interest or Management Charge does somewhat negate the effect, but there might be other costs or losses that I can put against them.
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