Gannons Solicitors 020 7438 1060
London solicitors specialising in the law relating to employment, partnerships/LLPs and company commercial
With commercial lending difficult to obtain, one of the more common approaches to obtaining finance for the self-employed is to take a second mortgage (or to remortgage) using one's home as security. However, with the advent of 100 per cent tax relief for capital expenditure on some items up to £50,000, the difference between taxable income and profits on which tax is paid can be very considerable.
If you are a self-employed person considering a mortgage or loan application and the application asks for your taxable profits, where these are less than the taxable income because a capital allowance claim has been made, it may well be worth contacting the lender and asking if it could confirm in writing that disclosure of taxable profit before capital allowances is an acceptable alternative.
It should also be remembered that the rules for obtaining tax relief on loans are strict and structuring such a loan the wrong way can lead to permanent loss of tax relief on the interest: always take professional advice.
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