Rolling over costs for CGT on a Buy to Let

by **bobbyd.2.3** on Sun Jan 22, 2012 3:10 pm

Hi there,

I have a buy to let property that I was planning on selling in 2009/10 and as such did not include the costs related to that property in the tax return of that year. I did not sell the property in the end and wish to include the costs in my CGT calculation for 2010/11. Would that be permissable?

Thanks very much in advance for your help.

by **Peter D** on Sun Jan 22, 2012 3:23 pm

Have you actually sold the property and if so when. Regards Peter

by **bobbyd.2.3** on Sun Jan 22, 2012 4:29 pm

Hi Peter,

The property has not been sold but I would like to offset the costs against the rental income...

Thanks
Bob

by **Peter D** on Sun Jan 22, 2012 4:40 pm

What costs exactly. CGT only applies on disposal. Regards Peter

by **mullet** on Sun Jan 22, 2012 5:34 pm

Firstly these are capital costs, so they cannot be claimed against your rental income. Capital costs can only be claimed against a capital disposal.

And even when you sell this property you will not be able to claim the costs of the aborted 2009-10 disposal. That is because the legislation allows the costs of THE disposal (my emphasis). Abortive costs are not the costs of the disposal; they are the costs leading up to a disposal which did not actually happen.

by **King_Maker** on Mon Jan 23, 2012 9:41 am

What are these "costs"?

Only revenue costs are deductible from rental income.

Have you read HMRC's Property Income Manual?

by **bobbyd.2.3** on Mon Jan 23, 2012 6:56 pm

Apologies, it's not CGT that I want to set the costs against, that's my mistake. They're refurbishment costs...

by **Peter D** on Mon Jan 23, 2012 7:46 pm

Refurbishment is a bit genral. What exactly did you do. If this was revenue why did you not account for it in the year of expenditure. You may be better revising the Tax return. Tell us more. Regards Peter

by **bobbyd.2.3** on Mon Jan 23, 2012 8:03 pm

Well it was double glazing, new bathroom, flooring and new kitchen. The reason I didn't include the costs in the year of expenditure was because I was going to sell the property and claim the costs against CGT on disposal.

Thanks for your help!

by **mullet** on Tue Jan 24, 2012 7:53 am

Well it was double glazing, new bathroom, flooring and new kitchen. The reason I didn't include the costs in the year of expenditure was because I was going to sell the property and claim the costs against CGT on disposal.

That sounds a bit cavalier. Firstly you need to decide whether this expenditure was capital or not. You can't just claim it against income or capital to suit your needs or to gain the best tax advantage.

If it was indeed a revenue expense for 2009-10, then you have until 31-01-2012 to amend that year's tax return and claim the deduction. But don't be surprised if HMRC then enquire into that amendment. And you can't claim it in your 2010-11 tax return, as it does not relate to that year.