Would you like tax relief on your mortgage interest?

Of course you would, and it is possible to effectively achieve this within a family if the circumstances fit.

It can work if as follows:

• You have for example a £100,000 mortgage.
• You sell shares in your family company worth £100,000 to your spouse (works the other way around of course, and also between civil partners).
• Your spouse borrows to pay for the shares under a commercial loan.
• You use the funds to clear your mortgage.
• Tax relief is then claimable by your spouse on the commercial loan as it is used to purchase an interest in a close company provided your spouse either (a) owns more than 5% of the issued ordinary share capital, or (b) owns some of the share capital and works for the greater part of their time in the management or conduct of the company.
• No capital gains tax is due on the share sale as the sale is between spouses.
• Stamp duty is payable of 0.5% on £100,000 = £500.

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