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Hi Alan, My clients are going to buy a residential property for the purpose of generating rental income. 75% of the purchase will be funded by bank loan. They wish to form a limited company for the purpose of buying and renting out the property. Two questions a)In order to claim tax relief on the loan interest the borrowed money must be used to directly purchase the property. Am i correct in saying that the property and the loan must be in the name of the company and if so the company can deduct 75% of the loan interest from rental income. b) Since 7.12.2010 interest on loans taken out to invest in a private trading company is no allowable. Although this is not a trading company and the loan is in the company name, can Revenue argue that this is effectively a loan to the directors to invest in a new property company and disallow the interest for some reason - Sec 97(2)(e)?

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Asked on 14 March 2013 2:33 pm