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  • Tax

    Mortgage Fees Offset

    Hi All,

    First Post:

    I have read in the forum that you can put in the remortgage fees as a cost in the accounts, does it still apply if the sum is added to the mortgage?

    Thanks

    Hiren

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    Yes you can recover the fees even when they are added to the mortgage.  The reason for it being allowed when added to the mortgage is that the mortgage is simply funding the payment of the fees.  Lastly you should be aware that the fees for the mortgage are caught as part of the s24 restriction on the financing of a property.

    Regards Nigel

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    Nigel Reynolds FCCA CMgr FCMI

    Property Tax Specialist

    Reynolds and Co

    http://www.reynoldsandco.co.uk


    If fee added to mortgage then I was advised to write down fee over a number of years, because effectively you've deferred payment of it.

    This may not be entire life of mortgage if you regularly remortgage.

    S24 means it's more effective to pay fee up front and get it out the way before s24 bites fully and can offset less of it.

    Other financial advice I've seen has conflicted with advice I was given and said expense it all in year incurred, even though payment of it had been effectively done over time through mortgage .

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.


    I believe you claim the cost in full in the year it is incurred.  It is charged to you in full the minute you take the mortgage regardless of whether you pay upfront or add it to the loan.

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