Thank you for your answer.
Can I please clarify your points just to ensure I have the correct understanding of everything:
'...just make sure that if they plan t claim the interest on the remortgage against the Buy to let rental income that the amount borrowed is not in excess of the original value of the property -...
...and that the buy to let on which the capital will be raised, had a value of at least £250,000 at the start of the buy to let income (to keep that in line with a permissible purchase and the interest then allowable against the rents (which will create further savings of tax against the joint rental position)'
Do you mean the current market value or original value that they purchased at?
The BTL property has a current market value of approx £400,000-£425,000. They are looking to raise £250,00 from this and will purchase a property for approximately £250,000.
The original purchase price of the BTL that they are refinancing was £95,000 purchased in 1999.
As the original purchase price was below £250k in 1999, is this a problem to do this?
My parents have remortgaged other properties in the past and this has not been raised by the accountant, I believe all interest on the mortgage payments have been claimed against the rental income. As far as we understood, it was just any capital repayments that cannot be offset?
So if they remortgage at £250k, only the interest paid on £95k can be claimed against the rental income?
So for all BTL properties, you can only offset interest up to the original purchase price?
Can you please also explain what a 'permissible purchase' is.