Remortgage on Buy to Let Properties for Buy to Let House Works

I have a number of buy to let properties in where my fixed term mortgage is coming to an end. I would need to re-mortgage these properties to get a better rate. However, I would also need to borrow extra on the new mortgage to do some major house works on the buy to let. In regards to the self-assessment how will this be treated? Would the monthly/annual interest still be offset against the income as an expense?

Hi,

The emphasis is the purpose of the loan not how the loan is secured.  The capital element of the loan is not allowable but to the extent the loan is used for the rental business the loan interest

and any loan arrangement fees will normally be allowable as a revenue expense subject to the restrictions for finance costs that started in 2017-18.  Finance costs that will be restricted include

interest on mortgages, loans (including loans to buy furnishings) and overdrafts.  Other costs affected are alternative finance returns, fees and any other incidental costs for getting or repaying

mortgages and loans.  From 2020-21 the interest can no longer be claimed as a revenue expenses, just as a reduction in tax at basic rate against tax due on rental profits.  You can refer to:

Property Income Manual

as this goes into this in more detail.

Thank you.