Interest relief for joint loans but not relief on joint investments
The moral is – to use a cliché – the devil is in the details. Make sure yours are right.
It seems odd that for couples who borrow funds in joint names tax relief is usually available for the interest paid by the spouse using the loan for a qualifying purpose HMRC normally accept an entitlement to full relief for the interest paid, even if the interest is paid out of a joint account (see HMRC’s Savings & Investment Manual 10040).
However, where one spouse takes out the loan, which is then used in a joint qualifying investment, HMRC’s view is that income tax relief would only be available to the spouse who took out the loan, and only then in proportion to the amount of qualifying investment by that spouse.
The moral is – to use a cliché – the devil is in the details. Make sure yours are right.
Comment on this blog in the space provided below, or visit my profile for details of how to contact me.
Cathy Corns is a Tax partner at Mercer & Hole.
