Allowable Procurement Costs - Mortgage vs Remortgage

[solange]

Hi Guys

Hoping someone can provide clairification on allowable procurement fees regarding a normal BTL mortgage versus an BTL remortgage.

My understanding is that

a) if I go out and buy a property that I intend to let out the following applies:

Legal fees and survey fees are disallowable and offset against cgt upon sale of the property
Mortgage arrangement fees (incl chaps transfer fee) can be amortised over lettable life of property

b) if I buy a property cash, then decide to re-mortgage 6 months later then the following applies:
Legal fees, survey fees and mortgage arrangement fees can be amortised over lettable life of property

My questions are
1) Are these assumptions correct?
2) To further complicate matters , if I was considering buying a property, got it surveyed prior to purchase, and the survey came back that it was not in a mortgageable condition at that time. However I then went on to buy the property cash with a view to carrying out renovations and remortgaging in 6 months time - I take it this initial survey fee would be disallowable as considered but could be offset against cgt?

Many thanks for any replies

Solange

[King_Maker]

Briefly :

a) Yes. Amortisable over the life of the mortgage.

b) Yes. Amortisable over the life of the mortgage.

Yes, the initial survey fee is always likely to be disallowed as a P&L deduction.

[solange]

Thanks for the clarification King_Maker - that's very useful.

Another quick related query - sorry

Say I spent money on getting a survey, started the convenyancing process for a new property purchase, only for the vendor to pull out - would these abortive costs be allowable?

Many thanks

Solange

[section 44]

No.

[solange]

Thanks for your reply section 44

Mmmm think I may have messed up in a previous years tax return as follows.

I spent money on finders fees, but finder let me down, properties never materialised but never returned the money - put these 'abortive' fees thro my accounts. Anyhow took the finder to court and recovered the fees so put the recovered fees back into my ccounts and the legal fees.

I guess all of this should not have gone into my accounts full stop?

[King_Maker]

Aborted property purchase costs are usually disallowable.

[solange]

Thanks King_Maker for your reply. I am Ok to just remove these costs in this years tax return?

As an aside,I have made a loss in all my returns, and had I not have included these costs I would still have made a loss in the year of its inclusion.

[King_Maker]

You could remove the current year expenses for these items plus the previous years in the current Tax Return.

Then your carry forward losses to 2011-12 would be correct.