Can You Claim Tax Relief on Interest When You Remortgage Your Home to Fund a Property Company? A Clear Guide for Landlords and Property Investors

sam76172
Nov 21, 2025
3 min read

If you’re a landlord running your property portfolio through a limited company, you may have wondered:

“If I remortgage my personal home to inject money into my property company, can I claim tax relief on the interest?”

The good news is:👉 Yes — in many cases, you can claim tax relief personally, even though the borrowing is in your own name and the company owns the properties.

At Sam Niranjan & Co, we see many clients using personal borrowing to fund limited company property purchases, refurbishments or working capital. This article explains exactly how the rules work, in plain English.

Why Would a Director Borrow Personally to Fund Their Property Company?

Common reasons include:

Raising a deposit for a property purchase
Funding refurbishment or capital improvements
Injecting working capital into the company
Reducing reliance on expensive bridging finance
Speeding up completion timelines

Personal remortgages often offer:

✔ Lower interest rates✔ Faster turnaround times✔ Greater borrowing flexibility

But the key question is: Is the interest tax-deductible?

The Key Tax Rule: Qualifying Loan Interest Relief (QLIR)

Under the Income Tax Act 2007 (sections 383–392), individuals can claim Qualifying Loan Interest Relief when they borrow personally to:

Buy shares in a close company, or
Lend money to a close company,

as long as:

They own more than 5% of the company, or
They work full-time for the company, and
The money is used wholly and exclusively for the company’s business.

Property companies that let property commercially also qualify, provided they let to unconnected tenants.

Does It Matter That the Borrowing Is Secured on the Director’s Home?

No.

HMRC cares about:

Who took out the loan
Who pays the interest
What the money was used for

The security (your home) has no impact on whether the interest is allowable.

Jointly Owned Property: Does It Change the Tax Relief?

If the property used as security is owned jointly with your spouse, this does not affect the tax relief.

What matters is:

Is the loan in your sole name?

✔ You may claim 100% of the interest.

Is the loan in joint names?

✔ You may claim your share of the interest (usually 50%).✖ Your spouse cannot claim their share unless they also meet the qualifying conditions (>5% shareholding or full-time working).

What Evidence Do You Need for HMRC?

HMRC may ask for proof that:

The loan was taken out by you personally
The funds entered the company
The company used the money for business

Useful documents include:

Mortgage offer
Bank statements (personal and company)
Director’s loan agreement
Board minutes
Confirmation statement showing your shareholding

At Sam Niranjan & Co, we prepare all of this for you as part of your year-end service.

Example: How the Relief Works

You remortgage your home and borrow £50,000. You pay £2,500 per year in interest. You inject the full amount into your property company.

If the loan is in your sole name:

👉 You claim the full £2,500 as Qualifying Loan Interest Relief.

If the loan is joint with your spouse:

👉 You claim £1,250 (your 50%).

Either way, it's a valuable tax-saving opportunity.

Why This Relief Matters for Landlords

Many landlords moved their portfolios into limited companies to:

Avoid the Section 24 mortgage interest restrictions
Retain profits at lower corporation tax rates
Benefit from long-term inheritance tax planning

Using personal borrowing to fund the company offers:

✔ Lower borrowing costs✔ Easier access to finance✔ Full personal interest relief (where conditions are met)

This can significantly reduce your overall tax bill.

Need Help Structuring Your Borrowing Correctly?

At Sam Niranjan & Co, we specialise in property tax and act for hundreds of landlords, developers, and property companies across the UK.

We can help you:

Assess whether your loan qualifies
Prepare the Director’s Loan Agreement
Ensure the company is structured correctly
Maximise interest relief
Comply fully with HMRC requirements

Get Expert Advice

If you are considering borrowing personally to fund your property company — or you want us to review an existing arrangement — feel free to get in touch.

📧 sam@snaccountants.co.uk📞 07878 070765🌐 snaccountants.co.uk