BTL remortgage fee - tax situation?

[Craigybaby69]

Hi, I'm an accidental landlord. I've just remortgaged and there's a £1500 fee that I've added to the debt. On my 2020-2021 tax return can I claim that £1500 cost to offset tax?
Cheers

[Casa1862]

I was told yes by an accountant, and that’s what I’ve been doing. All everyone thinks that is correct though.

[Countdown]

Yes you can

[Craigybaby69]

Nice one... Cheers

[MaxFromage]

Yes you can, but if you're a higher rate taxpayer, you'll only get relief at 20% tax for 2020/21.

[Condi]

MaxFromage said:

Yes you can, but if you're a higher rate taxpayer, you'll only get relief at 20% tax for 2020/21.

Is that not for interest? Fees I think are still 100% relief?

[Sir Bagalot]

Yes.... But....

You may not be able to offset the interest.

Depends on what the property was worth when it first entered the rental market, and what mortgage is on it now.

For example if you bought @ £100K with a £75K mortgage you know you can offset the interest.

Over time the property increases in value, let's say it's now worth £150K and the mortgage is now £100K. Although you can add to the mortgage you can't offset the interest on anymore than £100K, as that was the value of the house when it first entered the rental market.

[Craigybaby69]

Thanks for the info... So you can't offset the interest on the fees that you've added to your mortgage? But you can offset the fees themselves. I thought as of this tax year you can't offset any interest payments against tax? Even if you could, how do you work out how much of the interest your paying is for the original loan and how much is interest on the fees? Just ask the lender for the breakdown?