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  • Tax relief from mortgage on a different property

    We have purchased a property (Property B) which is to be used as either a residential let or furnished holiday let. Under either option my understanding is that I would be entitled to offset associated mortgage interest expense as an allowable expense (subject to a cap of 20%). However the mortgage has actually been taken out on our main property (Property A), which was unencumbered. Despite the fact the funding expense is on a separate property, does the fact that the mortgage was wholly and exclusively taken out for the purpose of purchasing Property B still permit me to use the mortgage interest for tax relief against the income derived from Property B?