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Do Lender arrangement fees on remortgage count if pay upfront. In year 2017/2018 ?
£1000 Fees upfront expense? £1000x 3 remortgages.
Or makes no difference and can not claim anyway.
So just add to loan £5 x 300 payments to each property.
Is this another expense that cant be claimed? If not why not? Come under different expense calculation.?
Considering you might need to refinance through a 25 year period to grow or spend/utilise equity without selling.
Governments can UTurn decisions, you can be heading in one direction and then gets better.
Reintroduce full mortgage interest relief and drop the 3% stamp duty surcharge
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Arrangement fees are fully tax-deductible against rental profits – finance fees are NOT capital costs. HMRC even (for the avoidance of doubt) refer to this in their ‘Property Income Manual’, section PIM2066, and the relevant legislation is the Income and Corporation Taxes Act 1988 Section 77, and ‘Income Tax (Trading and Other Income) Act 2005 section 272.
Finance fees are almost always added to the loan by landlords (though they can be paid upfront). It makes no difference to the tax deductibility of the finance fee expense whether the fee is paid or added to the loan, as the tax deduction is allowed when the expense is incurred, NOT paid.
My theory being till 2020
Thankyou for detailed response. And so quickly.
Paying for fees now Upfront claim in 2017/2018 75% of finance costs.
If remortgage another one after april 2018/2019. 50 % of finance costs.
By bringing forward the expense before its phased out, im taking advantage.
( Intial strategy is capital/repayment and overpay 10% per annum after 2020)
If im incorrect please inform me.
Every little helps.
I might be misunderstanding what you have said here but if i'm not, to my knowledge S24 only applies to the interest element of financing not the associated fees and charges.
Meaning interest relief is being limited but all your fees will be fully deductible in the future tax years that they occur. Therefore there is no reason to rush changing mortgages in order to claim any perceived higher reliefs now as they will (currently) not be changing.
Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk
So no point, just add fees to loan and pay off over longer timeframe.?
As I was incorrect with my assumption that fees were outside the grasp of S24 you are probably right to get them done as soon as possible while the relief is as high as it is going to be.
I'm afraid that is incorrect, interest and ALL incidental costs of taking out a loan are disallowed. See https://www.legislation.gov.uk/ukpga/2015/33/section/24/enacted
Section 272B(5)© refers.
I stand corrected Andrew thanks for that. I had been led to believe that it excluded fees but obviously not.
I would expect arrangement fees to be subject to S24.
What is section 24 never heard of it,
a branch of MI5 ??
A special place at local library ??
A unit at local hospital where you get kicked in the nads every year?
A prison area for the white collar workers of society?
A mortuary where buy to let goes to die.
Any place you find a huddle of landlords.