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Retired GP landlord

Can you solve an issue of keeping ownership of a surgery premises share in retirement and receiving cost rent income with tax relief on ongoing surgery mortgage interest payments? Is it correct that a GP's interest payments are no longer tax-deductible once they retire? I read somewhere that this is to do with the interest no longer being a business expense, so making retention of a premises share less financially attractive. Our accountants are treating a retired partner's surgery mortgage interest payments as tax-deductible against the rental income. I plan to retire soon and would like to do the same. I would hate to find out years down the line that this was an error requiring a large repayment to HM Revenue & Customs.

Interest on a loan used to purchase a property is an allowable expense and would be offset against rental income whether you are still a partner or not. This applies to any individual owning a second property which they rent out (to the practice in this case) and on which they pay interest.

What you will lose by continuing to hold an investment in the surgery premises after retirement is entrepreneur's relief from capital gains tax.

If you were selling your share when you retired you would qualify for entrepreneur's relief, which would reduce the capital gains tax from 18 to 10 per cent.

This is only available for business assets, and as your share of the property will become a non-business asset once you retire, you will not be able to claim this.

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