Interesting quirk

A partner (A) acquired a bank loan to buy into a partnership which has recently converted to a limited liability partnership. The money was used to repay a retiring partner’s capital account.

The loan is shown on the partnership balance sheet with interest being paid directly to the bank (rather than to A and then to the bank) and charged to A’s current account.

In an attempt to cut costs (i.e. interest charges) A refinanced the loan by a mortgage on his own house (jointly owned with his wife as joint tenants) hence the mortgage is now in joint names (Mrs A is a basic rate taxpayer).

Do readers feel that tax relief can still be obtained for 100% of the interest?

Alternatively should the partner undo his good idea and pay more interest if it means he is the only one to attract relief...