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Where Taxpayers and Advisers Meet
Capital Gains Tax re timeshare
My wife bought a timeshare in Malta on 28 April 2022 and up to 17 May 2023 rented out 13 weeks, 9 weeks in 2022/23 and 4 weeks in 2023/24. Her total rental income was £15,600 being £10,800 in 2022/23 and £4,800 in 2023/24. Part of the total cost was deducted from the rental income. In total 8 weeks a year are owned but in August 2023 the hotel raised their annual service charges from £4,500 a year to £10,600 and she owed them £12,000 on the cost of the timeshare and she couldn't get renters any more due to my wife having to increase the weekly rent from £1,200 to £2,000 to cover her costs. She set solicitors on, in August 2023, to try and get the hotel to buy back the 8 weeks but all they have been able to do is to get the £22,600 debt written off and she has lost the 8 week timeshare by default. My wife has declared the income in her 2022/23 and 2023/24 tax returns. In 2025/26 she will be declaring a capital gain on shares in a property company of somewhere in the region of £80,000 to £100,000; there will be a £14,000 loss on the sale of UK property in 2024/25 plus her share of a loss on our permanent lettings of approx. £24,000.In 2024/25 would she now be able to declare the timeshare as a capital loss? There is also the question of the legal fees paid in August 2023 of nearly £8,000.
Re: Capital Gains Tax re timeshare
There a lot of figures in that block of text, none of which relate to the capital loss.
The loss on the disposal will be an allowable loss, . The write-off of the debt might be regarded as consideration for the disposal. If not, it might be regarded as income if the charges written off were included as a cost in earlier rental accounts.
The legal fees will not be any part of the calculation of the capital loss.
The loss on the disposal will be an allowable loss, . The write-off of the debt might be regarded as consideration for the disposal. If not, it might be regarded as income if the charges written off were included as a cost in earlier rental accounts.
The legal fees will not be any part of the calculation of the capital loss.
Re: Capital Gains Tax re timeshare
Many thanks BD6759. So what will suffice as evidence that the timeshare has been lost due to default. Some of the cost has been written off as capital allowances against the income. So the legal costs should be written off against the income thus reducing the capital allowances in 2023/24? The problem with taking the hotel to court, in the BVI, is that they need more cases against the hotel to spread the cost of a barrister, so I've been told the wait is going to be at least 5 years - we might be dead by then and the debt will be passed on to the charities in our wills.