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Where Taxpayers and Advisers Meet

Is valuation fee allowable tax expense

sandy2000
Posts: 38
Joined: Wed Aug 06, 2008 3:33 pm

Postby sandy2000 » Fri Jan 20, 2006 8:34 am

I have been told that it could be , but can someone please confirm if valuation fee and brokers fee is an allowable tax expense in raising funds on own residence, to release equity to to buy an investment property with on a BTL mortgage (which will incur another val fee and broker fee) where, I understand, costs are not an allowable expense against income

Thanks
Sandy

Lambs
Posts: 1476
Joined: Wed Aug 06, 2008 3:15 pm

Postby Lambs » Fri Jan 20, 2006 2:03 pm

S,

The short answer is "Yes."

Please refer to:

http://www.hmrc.gov.uk/manuals/pimmanual/PIM2015.htm

for further guidance, in particular section 7. I should argue that if the only reason you are obtaining loan finance is so as to carry on a property letting business on a commercial basis, then it should be allowed. I should differentiate between valuation costs incurred in order to determine whether an item is worth the asking price, and a valuation undertaken at the direction of a prospective lender, for your commercial venture.

If you are contemplating a foray into property letting, it would be a good idea to consult with a suitably qualified professional, in order to ascertain what expenses are deductible, etc,. both in terms of the initial acquisition of the property, and on an ongoing basis when calculating the annual profits of the rental business.

Regards,

Lambs.

sandy2000
Posts: 38
Joined: Wed Aug 06, 2008 3:33 pm

Postby sandy2000 » Sat Jan 21, 2006 5:02 am

Hi Lambs

Thanks for your reply - much appreciated.

I'll start with one small BTL for now and see how it goes.

Regards

King_Maker
Posts: 6538
Joined: Wed Aug 06, 2008 3:22 pm

Postby King_Maker » Sun Jan 22, 2006 4:01 am

"If you are contemplating a foray into property letting, it would be a good idea to consult with a suitably qualified professional, in order to ascertain what expenses are deductible, etc,. both in terms of the initial acquisition of the property, and on an ongoing basis when calculating the annual profits of the rental business." - Lambs

Good advice.

I assume you have done your own research, and have not relied on valuations given by over-optimistic Estate Agents and Developers. Also, void periods can destroy any profit estimate.

Some lenders are no longer granting mortgages on new build/off-plan flats.


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