Mortgage arrangement fee tax deductible

When you let a property you are allowed to deduct costs incurred in the letting for income tax purposes. Costs that are related to the purchase or disposal are specfically excluded from the income tax relief. However there is a special deduction for 'incidental costs of obtaining finance. The `incidental costs of obtaining finance' are defined in ITTOIA/S58 (2). The expression means expenditure on fees, commissions, advertising, printing and other incidental matters. To qualify for the relief, the incidental costs must be wholly and exclusively incurred for the purpose of obtaining the finance (whether or not it is in fact obtained), of providing security for it, or of repaying it (sub-section (2)). Therefore the costs of arranging the mortgage as well as the costs of any early repayment fee should be tax deductible.