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Posted Sun, 07 Jan 2024 18:36:54 GMT by
Hi. My buy-to-let mortgage came with a product fee. I understand that it is a fee incurred when taking out a mortgage, meaning it is tax deductible. The fee was paid out in Jan 2022, so it is supposed to be a deduction for tax 21/22. However, my rental business started in Apr 2022 and 22/23 is the first year I submit my self-assessment. My question is, is the product fee qualified as a pre-commencement expense for tax 22/23?
Posted Fri, 12 Jan 2024 13:18:45 GMT by HMRC Admin 20
Hi Helen HL C,
Yu would class it as an expense for the 21/22 tax year so that a loss has then arisen for the rental income. this loss can then be carried into the 22/23 tax year.
Thank you.
Posted Sat, 20 Jan 2024 18:46:38 GMT by
Hi Thank you for getting back to me. As 22/23 tax year is my first year submitting tax return, I have not done a tax return for 21/22 tax year. So are you suggesting that I need to get my 21/22 tax return done now to report a loss for rental income? If so, how can this be done please? Thank you.
Posted Sat, 20 Jan 2024 19:43:30 GMT by
Hi Sorry, did some reading just now. My new understanding is that the expense could be treated as a ' pre-letting expense', which could be treated as if they were incurred on the date the property business started (in my case, Apr 22) and hence is an allowable expense for 22/23 tax year. Could you let me know if my new understanding is correct please? Thank you.
Posted Tue, 23 Jan 2024 15:06:42 GMT by HMRC Admin 5
Hi Helen HL C

It must meet the conditions at PIM2505 - Beginning and end of a rental business: commencement to qualify and if so, you would just need the 22/23 return.

Thank you


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