Capitol Gains On New Build

Swanscity

In 2011 I owned a plot of land. I had an interest only mortgage on the plot in my name only. I could not afford to pay for the built so 2 friends built and sold the house for an agreed return.
When completing my self assesment my accountant included interest payments from the mortgage in the assesment which calculated no gains.
I have recently recieved a letter form HMRC Compliance questioning the assesment. Concerned about accountants completion of the assesment and being hit by tax bill am I allowed to include mortgage interest in the capitol gains calculation?
Any help be appreciated!

Pennywise

According to HMRC's CGT manual, interest isn't allowable for capital gains tax. http://www.hmrc.gov.uk/manuals/cgmanual/CG15284.htm

purdyoaten

Are you absolutely certain, op, that the accountant declared the sale as a capital gain as opposed to a trading profit?

Swanscity

Return was done under capitol gains. Spoke to accountant he is adamant that mortgage interest can be included. All the information personnel in my local HMRC office have been made redundant so cant get any advice and I dont have a spare 12 hours to listen to answer machine on HMRC phone helpline. Right pain in the bum :mad:

Dr_Teeth

Swanscity wrote: »

Spoke to accountant he is adamant that mortgage interest can be included.

Your accountant would do well to look here and here. It's pretty explicit that interest can only be included if you're a company.

purdyoaten

Dr_Teeth wrote: »

Your accountant would do well to look here and here. It's pretty explicit that interest can only be included if you're a company.

Completely concur.

antrobus

purdyoaten wrote: »

Completely concur.

Well, the statement "no payment of interest shall be allowable" could hardly be misunderstood.

I think the OP might need a new accountant.:)

Or possibly (come to think of it) a new solicitor. One who knows a thing or two about professional negligence.:)

purdyoaten

antrobus wrote: »

Well, the statement "no payment of interest shall be allowable" could hardly be misunderstood.

I think the OP might need a new accountant.:)

Or possibly (come to think of it) a new solicitor. One who knows a thing or two about professional negligence.:)

Well Yes - but I was actually referring to what the accountant should be doing or, as you suggest, hopefully ex-accountant.