Property letting - maximising tax relief on interest
As you are probably aware, you can claim interest relief on let properties. The mortgage interest on your let properties is set against any rental income received to reduce the taxable amount.
It is possible to increase the borrowings on let property, up to the market value of the property when it was first let, and continue to obtain relief for interest against the rents. There is no requirement for the funds raised to be used for the property – you can buy a car, pay off debts, whatever.
The tax saving may be significant.
Date: 21st May, 2008
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