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Where Taxpayers and Advisers Meet
Property Taxation
My wife has had an outbuilding demolished at her buy to let property. She has done this to create car parking spaces for her tenant. Is the demolition of the outhouse (an old brick shed) considered a capital expense that can be offset against unearned income?
Re: Property Taxation
I have received advice from a third party who is of the view that the demolition work is a capital expense and can be offset against CGT when the property is sold.
Re: Property Taxation
Was the purpose of the expenditure to enhance the value of the asset?
Re: Property Taxation
No, simply to provide car parking bays for my wife's tenants in a village where street parking is extremely difficult.
Re: Property Taxation
Then it is an allowable cost for capital gains.
It is not as simple as “capital” means allowable. The expenditure must be for the purpose of enhancing the value of the asset and must be reflected in the state of the asset at the time of disposal.
It is not as simple as “capital” means allowable. The expenditure must be for the purpose of enhancing the value of the asset and must be reflected in the state of the asset at the time of disposal.
Re: Property Taxation
First line should say:Then it is an allowable cost for capital gains.
It is not as simple as “capital” means allowable. The expenditure must be for the purpose of enhancing the value of the asset and must be reflected in the state of the asset at the time of disposal.
It is NOT an allowable cost
Sorry for that.
Re: Property Taxation
...unless it enhances the value of the property?
(i.e. as an extreme, replacing useless rotting shed with useful hard standing for parking cars).
(i.e. as an extreme, replacing useless rotting shed with useful hard standing for parking cars).
Re: Property Taxation
Just to be clear, I take it that it is an allowable CG expense because it enhances the value of the asset. Is that right? A local estate agent say the value of the property (now) with two parking bays increases it by 10 and 15 thousand pounds.
