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Correspondence from readers on topical subjects.
Property revaluation
I have just got round to reading John's article on page 123 of Taxation, 3 November 2005. He says that BIM 45700 allows borrowing against revaluation reserve. In Example 3 it specifically says that it does not:
Correspondence from readers on topical subjects.
Property revaluation
I have just got round to reading John's article on page 123 of Taxation 3 November 2005. He says that BIM 45700 allows borrowing against revaluation reserve. In Example 3 it specifically says that it does not:
'In this example the revaluation of the premises is shown as a separate revaluation reserve on the balance sheet. But it could have been treated within the capital account to increase the proprietor's capital account balance. This would not affect the restriction of the loan interest. Mr X's capital account would be in credit by £100 000 but this would have to be adjusted by reference to depreciation and revaluation.'
This does not affect the initial point made by John that the remortgage can be used to purchase a new property as all the funds are being used to buy property and...
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