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TonyTax
TonyTax, Tax Consultant
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I boughta buy-to let propery and used £35k on my own money

Resolved Question:

I boughta buy-to let propery and used £35k on my own money as a down payment.
With rising property prices I want to increase the mortgage to release the £35k to either reinvest or pay down debt. WHat is the tax position
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

If you borrow against the property, there is no tax to pay on the borrowing itself. Any income it produces will be taxable however.

You should be able to claim the interest on the new borrowing against the rental income as well as that on the original borrowing as you are simply withdrawing your original investment in the property business by way of a mortgage. Take a look at the example under the heading "Withdrawing Capital" here.

I hope this helps but let me know if you have any further questions.
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