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Where Taxpayers and Advisers Meet

CGT - Mortgages

Posts: 2
Joined: Wed Aug 06, 2008 3:02 pm

Postby jia » Thu Feb 20, 2003 12:00 am

I have an investment property that I wish to sell.
I purchased the property for 75K 10 years ago and is now worth 225K.

Two years ago I remortgage the property by taking a 125K mortgage on the property.
The mortgage proceeds were used to set up a business abroad.

The question is how does the IR treat the 100K mortgage when the sell the property. Is the sum deductible or allowable to offset the capital gain that I have made. In otherwords is a capital expense.

My question is directed only in terms of CGT and NOT income tax.


Ian McTernan CTA
Posts: 1232
Joined: Wed Aug 06, 2008 3:02 pm
Location: Bedford

Postby Ian McTernan CTA » Fri Feb 21, 2003 12:00 am

Mortgages have NO affect for CGT- the cgt calculation is based on purchase price plus legal costs of purchase and sale, estate agents fees and enhancement expenditure.

If you have lived in the property at any time this complicates matters but makes the calculation more favourable. Being married may also help.

If you wish more details please contact me and I would be happy to do the calculation for you at my normal rates.


Ian McTernan CTA
McTernan Associates Ltd
tel. 020-7629-3119
fax. 020-7355-1778
McTernan Associates Ltd
Chartered Tax Advisers
Email through link on website:

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