Interest in advance and tax

[Nominees]

I was just wondering. If I buy a property in january, mortgage it and then pay a year in advance interest, and then sell the property in June of the same year. Can I claim the "year in advance" interest I paid to the bank even though I only held the property for 6 months?

Awaiting your replies.

Thanks,

Nom

 

[Aceyducey]

I was just wondering. If I buy a property in january, mortgage it and then pay a year in advance interest, and then sell the property in June of the same year. Can I claim the "year in advance" interest I paid to the bank even though I only held the property for 6 months?

Wouldn't you get the interest for the second six months back from the bank when you pay out the loan?

In which case you'd be committing (bloody obvious) fraud.

Cheers,

Aceyducey

 

[Nominees]

OK I gave the wrong example.

Let's try again:

What would happen if you buy a property in April and have every intention of keeping it for a long time (> 5 years). You then decide to pay one years interest in advance so that you can claim this on your tax return. (you would do this before the end of June for that year.) Then you fill in your tax return by the end of July.

Then for reasons beyond your control you have to sell in August?

What happens then? Would you be able to claim a years interst in advance even though you have only held the property for a few months?

The question is not so much whether you can get the money back form the bank but rather claiming a whole years interest as a tax deduction, but really only having the property for a few short months.

Would we be required to make an amendment to our tax return after it has been submitted?

Thanks,

Nom,