IPRU-INV 5.7.1R can be illustrated as follows:
Current market value |
£200,000 |
Net book value |
£100,000 |
Mortgage |
£70,000, including £5,000 payable within one year |
Qualifying amount is the lowest of: |
|
(a) 85% x £200,000 = |
£170,000 |
(b) 85% x £100,000 = |
£85,000 |
(c) £70,000 - £5,000 = |
£65,000 |
i.e. £65,000 |
|