Adverse possession costs as a taxable expense?

[markedman]

Hi folks

Ten years ago I was gifted a rental property by my mother, the property had been in my family for generations. I have managed the property and declared and paid my taxes on the rental income. There was a very complicated issue regarding the title of the property which i was able to resolve through a very long and expensive process of adverse possession with the land registry and i now have full ownership with a possessory title.

I was wondering if the cost of adverse possession are a deductable expense on my income tax return? My solicitor says yes as did an accountant after a brief chat but something makes me feel they are incorrect. Is it possible to include this on my tax return with the relevant paperwork and let the HMRC decide or could this be seem as fraudulent declaration if they disagree with it. I want to do things correctly but just cant seem to find any clear advice online, I did phone the HMRC but it was clear right away they had absolutely no idea.

Thanks in advance
Gary

[bd6759]

S38(1)(b) TCGA 1992

https://www.legislation.gov.uk/ukpga/1992/12/section/38

[markedman]

hi, sorry but the link doesnt work, could you perhaps paste the relevant information to here please?

[markedman]

thankyou i have found the relevant information and if i am correct the adverse possession costs are a chargeable gain and not something for my tax return.

[bd6759]

Yes.