Is a loan a claimable expense?

Is a loan a claimable expense? I am looking at the advice online- “Expenses incurred wholly and exclusively for the property rental business” For example a boiler is replaced. But a loan is taken out to cover the costs, to spread payments and make it affordable. Do you claim for the whole boiler cost. Or do you claim for the monthly expense of the boiler plus interest. As the boiler needed replacement (not improvement) and the loan is an expense incurred wholly and exclusively for the property rental business? Thanks

Or I’ve just thought of a possible third option. Claim the cost of the replacement boiler in full. Then just claim the interest on the loan each financial year. Please advise thanks.

Hi,
In the case of residential property, HMRC normally accepts the let property itself as the entirety and so replacement of a part of the entirety, for example a boiler would normally be classed as a repair to the entirety. As long as the new boiler is the closest equivalent in capability, then the replacement boiler will be a revenue repair. So provided this is the case, the cost may 
be claimed as allowable maintenance and repairs. In terms of claiming loan interest, this will fall under finance costs and be subject to the finance cost restriction.  Please refer to  
Work out your rental income when you let property
BIM46920 - Specific deductions: repairs and renewals: what is a repair: different materials
BIM46925 - Specific deductions: repairs and renewals: what is a repair: changing technology
PIM2054 - Deductions: interest: restriction for income tax purposes from 2017/18: introduction
Thank you

Hi thanks very much. Effectively what I take from that, is I can claim for the boiler. But the loan will be covered under the Sections 272A and 272B of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA05) restrict the proportion of interest that can be claimed, on a sliding scale down from 75% to 0% in successive tax years. it being after 2020, 0% of the loan can be claimed back.

Sorry just checking, whilst I can’t claim the loan back as an expense, to reduce income and therefore tax paid. Can it be added to the, I think the term is “relievable amount”?

All sorted now thanks for your help

Hi,
Prior to 2017 to 2018 the loan interest would have been allowable as a revenue expense. However, from 2017 to 2018, over a period of 4 years, the tax relief that landlords of residential properties get for finance costs was calculated differently and was gradually restricted to the basic rate of Iincome Tax. You can see guidance, including examples, here:
Tax relief for residential landlords: how it's worked out
From 2020 to 2021 onwards to claim relief for residential property finance costs you need to enter the costs claimed for at box 44 on the property page of your Self Assessment tax reurn.
Thank you.

Thanks very much