what to deduct from capital gain tax?

[adam1960lee]

hi guys

little query:

i bought a property for £248,000.00 in 2007 and sold in 2013 for £325,000.00

my cost on buying:
stamp duty: 2,380.00
legal fees: ,1500.00
survey fee: 500.00
product fee: 3,500.00

remortgage:
legal fee: 1,000.00
product fee: 4,500.00
early redemption fee: 5,200.00

WorK: Double glazing: £12,500.00 (previously there was no double glazing).
Bring bathroom from first floor to ground floor) this allow us to create a extra bedroom. £8,500.00

Then we rented the propery out:

Sale:
Estate fee: 6,000.00
legal fee: 1,000.00

my accountant made my CGT 22,000.00 and i informed him that he needs to take the above cost into consideration?

Am i right?

please advise

[section 44]

WorK: Double glazing: £12,500.00 (previously there was no double glazing).

Presumably prior to the work there was glazing, albeit not double glazing. This work would be repair and maintenance of your property.

[King_Maker]

I assume that you never lived in the property?

If not, all the items should deductible for CGT purposes EXCEPT :

1. Product fee, if relates to the mortgage. It should have been deducted from rental income.

2. All the re-mortgage fees. They should have been deducted from the rental income.

[section 44]

If not, all the items should deductible for CGT purposes

So if the property was let the double glazing cost would be deductible in calculating the letting business profits that are subject to income tax and also deductible for CGT purposes? A double tax deduction sounds unusually generous

[Ian McTernan CTA]

You didn't say whether you ever lived in the property- can you clarify?

You need to check what has been included against the rental income with your accountant- if he didn't deduct some of the costs at the time then it may be possible to include them as capital costs.

I assume the accountant has been made aware of all the expenses as you incurred them.

[King_Maker]

If not, all the items should deductible for CGT purposes

So if the property was let the double glazing cost would be deductible in calculating the letting business profits that are subject to income tax and also deductible for CGT purposes? A double tax deduction sounds unusually generous

You are quite correct about the double glazing. This would have been installed after HMRC's change of practice on the matter.

For some reason, I was contemplating that improved double glazing had been installed.