nc77

Hi HMRC 17. I'm still unclear from your response as I've looked again at BIM45820 and it explicitly states that an early redemption is not a premium, but is in fact an incidental cost of raising finance, which will therefore attached relief. BIM45820 states - The majority of break payments that take the form of a penalty for early redemption of the loan will represent genuine compensation to the lender. In such circumstances the break payment will not amount to a premium and will therefore attract relief as incidental costs of raising loan finance. Most High Street lenders commonly require such break payments as a condition of advancing finance. However there is no intention at the outset for a premium to be paid, that more capital is repaid than originally advanced. Instead any break fee received is compensatory. Consequently, why is this not applicable to be included in Box 44 as a finance cost, given that BIM45820 states it is an incidental cost and not a premium? Many thanks

BIM45820 states that incidental loan costs and residential property Finance costs will attract relief. I am NOT looking to claim the early redemption fee against Capital Gains or Rental Income, but want to set the ERC against 20% relief for finance costs. I have read extensively across the self assessment help pages and manuals and found the following statements that state that fees and break payments attract the 20% Tax relief on residential property income - Finance costs restricted: Other costs affected are: - fees and any other incidental costs for getting or repaying mortgages and loans - ie. fees to repay a mortgage (which is what an ERC is) - BIM45820 The majority of break payments that take the form of a penalty for early redemption of the loan will represent genuine compensation to the lender. In such circumstances the break payment will not amount to a premium and will therefore attract relief as incidental costs of raising loan finance - Box 44 says put the amount of any costs, interest and alternative finance payments in box 44. (ie. finance payments) Please would you confirm that I can include the ERC in Box 44.