Question:
I borrowed £25,000 from a friend. He is charging me 5% interest. I used the money wholly to fund the deposit for a buy-to-let. Can I assume that the interest he is charging me is an allowable deduction against the profits from the buy-to-let?
Arthur Weller replies:
You can assume that the interest he is charging you is an allowable deduction against the rental profits from the buy-to-let. However, I would advise you to put this loan agreement into writing, just in case HMRC question you.
