own labour costs against capital gains

arfur

Last question for now.....

Husband did most of the work in getting first property (now let) into fit state to repair, can an allocation be made to offset capital gains for his labour costs? If so is there an amount this should not exceed?

Obviously no receipts other than cost of tools etc to do the jobs.

Also now that the property is let, it any work needs to be done in between can any of his time be charged against rental income?

Thanks in advance for any help or guidance on the questions posted today. I thought I had all this in hand but recent trip to accountant has confused me more.

CLAPTON

basically no, he can't charge his time

in any event what would be the point as he would have to pay income tax on his earnings from himself

arfur

He currently does not have any other earnings so providing it was under limit for tax he would not have to pay income tax. It was our accountant who advised us we could do this. Was this incorrect advice

TM1976

Who owns the property? What is your husband's trade? Is he self employed?

arfur

Mortgage in joint names and so for Inland Revenue purposes 50/50 (however see my other thread about changing % split for future), husband currently self employed but no income other than rental at this time.

TM1976

My feeling is this is dubious but if your accountant has experience to suggest otherwise I would defer to this.

mikey72

Wouldn't he then have to declare all labour costs as income?

TM1976

mikey72 wrote: »

Wouldn't he then have to declare all labour costs as income?

He would, but this is the point; he has no income in the year so he wants to effectively use some of his personal allowance to reduce the base cost of the property for CGT.

fengirl_2

Time cannot be charged, only actual costs paid in money.

arfur

Thanks for advice, I am a bit concerned though that most of information accountant gave does not seem right from responses given. Think best pick up with him tomorrow.

Is there any guidelines written anywhere in regard to not charging for time?

fengirl_2

MOst legislatio deals with what you can do, meaning that if it doesnt say you can do it them you can't. Its a basic of anything to do with tax that money has to actually be expended in order to count. If you don't spend the money, it can't go through the boks.