Question:
I live in a property with a residential interest-only mortgage and I have rented out a property which I inherited which currently has no mortgage. Can I claim the interest on my residential mortgage against the rent on the basis that if I mortgaged the let property I could pay off the residential mortgage and would not need it? Also do I have to get a buy-to-let mortgage on the rental property and pay off the residential one in order to claim the interest against the rent?
Arthur Weller Replies:
You cannot claim the interest on the residential mortgage against your rental income from the rented property. The argument you put forward is not accepted by HMRC. You will need to do as you have written, i.e. get a buy-to-let mortgage on the rental property and pay off the residential one in order to claim the interest against the rent.
Arthur Weller replies:
