Property potential

15 September 2009

Issue: 4223 / Categories: Forum & Feedback , Business , Income Tax

A client has purchased a property from his uncle’s estate, apparently at a reduced valuation. The purchase was funded partly by cash with a mortgage used for the balance. The property is to be let out

A client’s uncle died last year and in the estate was a property that was valued at £350 000 at the date of death. Even though the estate had not been finalised and despite the property not actually being left to him my client spent £60 000 doing the property up! He has recently received an offer from the executors to purchase the property for £250 000. I understand that this price is in recognition of his care for his uncle at the end of his life.

My client is going to purchase the property for £250 000 and then rent it out. In terms of finance he intends to pay £100 000 from his own cash funds and to borrow £150 000 by increasing his current mortgage with Western Pebble.

I am wondering what potential borrowings he could make against the property so that the loan interest...

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