Mark Smith (Barrister-At-Law)

Registered with Property118.com
Wednesday 27th November 2013


Latest Comments

Total Number of Property118 Comments: 219

Mark Smith (Barrister-At-Law)

15:24 PM, 5th August 2019
About 3 weeks ago

Can Lifetime BTL Mortgages be used to accelerate our plans?

Reply to the comment left by Mark Alexander at 05/08/2019 - 13:53
It is the interest on the new loan that is the deductible expense. The new loan replaces the cash removed from the business by the taxpayer and the cost of the new loan is therefore in principle allowable.... Read More

Mark Smith (Barrister-At-Law)

21:28 PM, 3rd August 2019
About 3 weeks ago

Can Lifetime BTL Mortgages be used to accelerate our plans?

Note to all our readers- Mark A and I normally have these exchanges offline until one of us convinces the other. We can then have a united front on the matter in hand, which we always arrive at in the end.

We are now agreed on the issue raised by the question on the tax credit. Mortgage arrears I would say are in the same category and should be accounted for in the same way.... Read More

Mark Smith (Barrister-At-Law)

21:13 PM, 3rd August 2019
About 3 weeks ago

Can Lifetime BTL Mortgages be used to accelerate our plans?

If that is so then I certainly would not campaign for these sums not to be allowed.
s.27 ITTOIA https://www.legislation.gov.uk/ukpga/2005/5/section/27
says that an expense claimed carries with it no implication that the sum related has actually been paid. The claiming of an expense is a debit to the taxpayer's income.

See also s.58 https://www.legislation.gov.uk/ukpga/2005/5/section/58

58Incidental costs of obtaining finance
(1)In calculating the profits of a trade, a deduction is allowed for incidental costs of obtaining finance by means of—
(a)a loan, or
(b)the issue of loan stock,if the interest on the loan or stock is deductible in calculating the profits of the trade.
(2)“Incidental costs of obtaining finance” means expenses—
(a)which are incurred on fees, commissions, advertising, printing and other incidental matters, and
(b)which are incurred wholly and exclusively for the purpose of obtaining the finance, providing security for it or repaying it.... Read More

Mark Smith (Barrister-At-Law)

20:54 PM, 3rd August 2019
About 3 weeks ago

Can Lifetime BTL Mortgages be used to accelerate our plans?

All of these sums are finance costs. The issue is when they are brought into account. If there is no payment required to be made by the taxpayer in a tax year attributable to finance costs then I cannot see how the right to a tax credit accrues in that year.
If there is a further loan taken out by the taxpayer which is applied to service previous borrowing then the position is different as this is a payment made by the taxpayer.
If it is merely a ledger entry adding a further year’s interest then I do not think it attracts a tax credit.
Willing to be persuaded otherwise... Read More

Mark Smith (Barrister-At-Law)

20:08 PM, 3rd August 2019
About 3 weeks ago

Can Lifetime BTL Mortgages be used to accelerate our plans?

So unless the taxpayer has to make payments in that tax year that would be allowable expenses but for s.24 disallowance I cannot see how the tax credit... Read More