Forum Home Search Login Register
+  Landlord Forum
|-+  General Category
| |-+  Finance
| | |-+  Do Mortgage Arrangement Fees count as Interest for tax

Do Mortgage Arrangement Fees count as Interest for tax

Pages: [1]
Print
Author Topic: Do Mortgage Arrangement Fees count as Interest for tax  (Read 752 times)

Pete

Newbie
Posts: 20

I like property
« on: August 06, 2020, 02:17:43 PM »
Hi,
I am in the process of switching an existing mortgage with TMW to a new deal. Some deals are free of arrangement fees and are generally around 3.00% but they are offering a 1% deal for one year with a 2% fee. Both deals work out at around the same amount of overall cost but I'm wondering because interest payments are capped at a 20% tax allowance is the arrangement fee regarded as interest or an expense tax wise?

Hope that makes sense.

Many thanks

Simon Pambin

Global Moderator
Hero Member
Posts: 541

I like poetry
« Reply #1 on: August 10, 2020, 05:10:08 PM »
It's treated as a cost of finance i.e. allowable at 20% in the same way as interest. Otherwise you'd be seeing a lot of BTL mortgages with very low rates but spectacularly large arrangement fees..

https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords
Pages: [1]
Print