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Posted Fri, 27 Dec 2024 16:11:10 GMT by richardclarke34 clarke
I took out a buy to let equity loan (against the value of one of my properties) 10 years ago which has just matured. How do I treat the equity fee that I paid to the company on maturity. No interest was paid on the original amount forwarded to me, instead, I paid a share of the increase in the value of the property at the ten years maturity. Do I offset it against capital gains when I sell the property in the future or is it treated as an expense I offset against my rental income from my portfolio in this years tax return? Thanks
Posted Wed, 15 Jan 2025 15:23:43 GMT by HMRC Admin 20 Response
Hi,
As per HS340 attached, tax relief is available for alternative payments paid on a qualifying loan on the same basis as someone claiming relief for interest paid on a loan.
You would declare this as a residential finance cost within your Self-Assessment Tax Return, which would claim relief at the basic rate.
HS340 Interest and alternative finance payments eligible for relief on qualifying loans and alternative finance arrangements (2024).
Thank you.s

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