When dealing with cross border investments, it's important to keep an eye on the UK's transfer pricing legislation which can catch the unwary. The purchase of a property by an overseas landlord can be affected if the purchase is highly geared and the loans are from overseas lenders.
- Q.
- How much loan interest can be deducted from rental income?
- A.
- Provided the loan has been agreed on arms length commercial terms then all the interest on loans used to purchase or improve the property will be allowed as a tax deduction