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Where Taxpayers and Advisers Meet

CGT allowance

devon
Posts: 53
Joined: Wed Aug 06, 2008 3:14 pm

CGT allowance

Postby devon » Tue Jan 14, 2020 12:13 pm

I have recently sold a buy to let apartment purchased some 9 years ago so there is a significant capital gains liability.

I am aware that I can claim the purchase and sale costs against the capital gain but would appreciate advice on claiming against the gain the cost of restoring the property to a saleable condition following a break in by intruders and the malicious damage that occurred during the absence through illness of the final tenant.

The estate agency that was responsible for letting the property undertook the repairs and restoration needed to make the apartment habitable, and presented me with two bills for £580 and £1035 both of which detailed the repairs and restoration work undertaken. Is there a valid claim for these bills against the capital gain?

A claim against the building insurance has been rejected due to a £5000 excess clause in the managing agent’s buildings insurance

pawncob
Posts: 4420
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: CGT allowance

Postby pawncob » Tue Jan 14, 2020 5:53 pm

Strictly they're revenue items and deductible against income. However, if the place has not been let since the repairs, you could claim that they're improvements to the property and deductible against CGT.
With a pinch of salt take what I say, but don't exceed your RDA

wamstax
Posts: 1873
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: CGT allowance

Postby wamstax » Tue Jan 14, 2020 6:09 pm

Repairs "to restore" to an habitable state that declined during someone's period of ownership can hardly in my view be classed as capital improvements given that the property seems to have previously been habitable but declined during the letting period. Only recourse would have been to carry these forward against future profits which the sale has now negated - unless of course you had a property letting portfolio with other lettings continuing.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

devon
Posts: 53
Joined: Wed Aug 06, 2008 3:14 pm

Re: CGT allowance

Postby devon » Tue Jan 14, 2020 9:58 pm

Thank you Warmstax for your valued comment. “Unless of course you had a property letting portfolio with other lettings continuing.

I do in fact have two further rented properties which continue to generate rental income. Am I to understand that the two bills for the sold property can be claimed against the rent from the let properties?

wamstax
Posts: 1873
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: CGT allowance

Postby wamstax » Wed Jan 15, 2020 12:06 am

Yes as long as your lettings are of the same type e.g. full rental/ tenants repairing lease etc and you would arrive at your property portfolios net profit by adding together profits/losses of all the properties that were available for letting in the year in your portfolio.
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

wamstax
Posts: 1873
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: CGT allowance

Postby wamstax » Wed Jan 15, 2020 12:07 am

And by the way it’s wamstax not warmstax
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website


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