Capital Gains Tax - Additional Costs

michaels2411

Hi all,
Just wonder if someone can help me. I have two properties, but selling one. I have renovated it and improved somewhat by landscpaing the garden and also knocking a wall through etc..

My quesiton is can any of these kinds of costs be used to lower my CGT under additional costs incurred? At present I believe additional costs include surveys, solicitors and estate agent fees but am unsure what else - any clarification what can be claimed back and what cant would be most welcome.

Thanks

Nicola_Ed

Hi

The following links may help. ( I prefer to post links to the HMRC website than give advice to counter the "advice from a man down the pub" criticism which can be levied on here)

http://www.hmrc.gov.uk/manuals/cgmanual/CG15160.htm

http://www.hmrc.gov.uk/manuals/cgmanual/cg15180.htm

http://www.hmrc.gov.uk/manuals/cgmanual/cg15186.htm

I assume you have not claimed any costs against the rent received?

Have you ever lived in the property?

Nicola_Ed

Below is in relation to costs of disposal.

CG15250 - Expenditure: incidental costs of acquisition and disposal

TCGA92/S38 defines the incidental costs of acquisition and disposal. The definition is exhaustive. NO OTHER EXPENDITURE IS ALLOWABLE.
.
Allowable incidental costs are limited to

• fees, commission or remuneration paid for the professional services of any

• • surveyor, valuer or auctioneer
  • accountant or agent
  • legal adviser

• costs of transfer or conveyance (including Stamp Duty or stamp duty land tax)
• costs of advertising to find a buyer or seller
• costs reasonably incurred in making any valuation or apportionment required for the purposes of the Capital Gains Tax computation.

The expenditure must have been incurred WHOLLY AND EXCLUSIVELY for the purposes of the acquisition or disposal.

michaels2411

Thanks Nicola. This has been most helpful, looking through the CGT manual, the Enhancement expenditure is quite interesting. including a swimming pool example!

To answer your other questions, no the property has never been rented out, i've not lived there for any sustained period of time, just whilst working close to the company office. from time to time. I'm not going to try to 'flip' the property or anything, I'm no politician..

Nicola_Ed

Hi - there are reliefs for properties that have at any point have been your "main residence". You cannot alter the facts of where you lived but you may wish to review this if the CGT payable is substantial.