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  • Tax

    Parents mileage and BTL deposit

    Hi

    Before letting out my first BTL property i did a few repairs to the house, i had some help from my parents. I'm going to claim the mileage i did travelling to and from the property and to suppliers etc.. Is it possible to put down the mileage my parents did when they were travelling to and from the property to help with repairs?

    Also my parents suggested that they want to take a small remortgage on their property and gift me the money for a deposit on another BTL, im not sure i want to go down this road but if they do could i claim the interest on their remortgage as a business expense like i would if i was to remortgage my residential property for a deposit? The money they would gift me would be wholly for the use of property investment.

    Thanks

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    Re: Parent's mileage ...

    Yes you could claim their mileage but you would have to give them the appropriate amount and that would then be deemed income for them which they would have to declare to HMRC and potentially pay income tax on.  So, all-in-all probably not worth it depending on the tax status of your parents.

    Re: Interest and cost on mortgage.

    As you parents would be incurring these cost, not you, even though they have borrowed the money to gift to you, it would not be a valid expense for you.

    Fred

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    You need to be careful here. In short yes. However:

    1) make sure that this is a cost to your business. So pay them the money!

    2) Your parents will have performed services for payment - so consider whether this hits self assessment obligations for them

    3) Your parents are in business (now) so they have income v costs. What are those costs?

    4) What is the consequence of those costs? Best if they kept mileage records as otherwise we get into the argument of which drop of fuel was used for business and which for personal!

    All that is a bit cumbersome. You paid "someone" for travel. Use 45p a mile for the first 10,000 miles (less there after) and be done with it.

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    Tax advisor and mortgage broker

    stuart@johnsonsca.com

    02039077022