Capital gains tax - which of these are deductable?

ognum

I have a rental property that I inherited 3 years ago which I have now agreed a sale on. The property is solely in my name.

I have never lived in the property, my rental income is fully declared to HMRC

My nominal gain is £130k from the probate valuation declared 3 years ago

Prior to rental I had some renovations done, which of these are deductible from my CGT liability

Internal and external decoration
Bathroom refit, including new bathroom suite, shower, tiling, radiator.
New carpets throughout
Legal fees to transfer property to my name.
Estate agents fees to sell
Legal fees to sell
Council tax while property is empty.

What % is current CGT? Can I claim more than one years CGT allownance?

Thanks you.

uknick

Decorating - no
Bathroom - yes
Carpets - no
Transfer costs - buying costs are allowed
Selling costs, including stamp duty - yes
Council tax - no

You can only claim the CGT allowance in year of disposal

CGT rate is 18% or 28% depending on what other income you have, i.e. it's taxed at your marginal tax rate. If you are a 40% tax payer, or above, it will all be at 28%. If you are a basic rate tax payer it is first taxed at 18%, then any amount that takes you into the 40% tax is taxed at 28%.

The following example is from the HMRC site;


Working out your Capital Gains Tax for 2013-14

You need to work out your total taxable income before working out which Capital Gains Tax rate to use.

1. First work out your taxable income by deducting any tax-free allowances and reliefs that you are entitled to.
2. Next see how much of your basic rate band is already being used against your taxable income. The basic rate band for 2013-14 is £32,010.
3. Allocate any remaining basic rate band first against gains that qualify for Entrepreneurs' Relief - these are charged at 10%.
4. Next allocate any remaining basic rate band against your other gains, these are charged at 18%.
5. Any remaining gains above the basic rate band are charged at 28%.

00ec25

ognum wrote: »

Can I claim more than one years CGT allownance?.

I agree with uknick and presumably you claimed the "no" costs against your income tax anyway so you can't double count

the personal allowance is an allowance in the year of sale, it is not cumulative

da_rule

Sorry uknick, when you say that you can claim stamp duty as a selling cost, what do you mean? As isn't it the purchaser who has to pay the SDLT?

uknick

da_rule wrote: »

Sorry uknick, when you say that you can claim stamp duty as a selling cost, what do you mean? As isn't it the purchaser who has to pay the SDLT?

Oops, my mistake.

gallygirl

ognum wrote: »

I have never lived in the property, my rental income is fully declared to HMRC


Prior to rental I had some renovations done, which of these are deductible from my CGT liability

Internal and external decoration

I agree with the others - this is not a capital expense. However, you should have claimed it as an expense on your tax return as it is allowable, even if you have just taken ownership of the property.

This is based on advice HMRC Advice - "BIM46935 – Specific deductions: repairs & renewals: what is a repair: effect of change of ownership.......
Kate can claim for the painting of the exterior. This is a job that has to be done every few years. It is normal maintenance work. Kate can claim this as an expense even though she has had it done just after she has acquired the asset."

Same principle applies to internal, allowable expenses to stop the property deteriorating. Not too late to ask for an adjustment I think?