Solicitors fee against tax?

legepe

Hi all,
I have one quick question before I submit my self assessment.
Can anyone confirm whether or not I am able to claim for solicitors advice fee for advising me regarding the contents of legal documents for a possible property purchase? I didnt buy the property but I still had to pay their fee and obviously I cannot put this down as a capital expense. if this is a legitimate expense what would it come under in the property expense section?
Thanks
legepe

Pennywise

legepe wrote: »

Hi all,
I have one quick question before I submit my self assessment.
Can anyone confirm whether or not I am able to claim for solicitors advice fee for advising me regarding the contents of legal documents for a possible property purchase? I didnt buy the property but I still had to pay their fee and obviously I cannot put this down as a capital expense. if this is a legitimate expense what would it come under in the property expense section?
Thanks
legepe

No it's not an expense. It IS capital, not allowable against rental profits.

legepe

doesnt capital have to relate to something physical.. for example if I had bought the property I was paying the solicitor advise on then I could sort of understand it to be capital, but because I didnt buy it.. their fee and cost to me is not really attached to anything.. and is in limbo, however, as another example if i employ an accountant for advice then wouldnt their fee be allowable against tax?

Pennywise

legepe wrote: »

doesnt capital have to relate to something physical.. for example if I had bought the property I was paying the solicitor advise on then I could sort of understand it to be capital, but because I didnt buy it.. their fee and cost to me is not really attached to anything.. and is in limbo, however, as another example if i employ an accountant for advice then wouldnt their fee be allowable against tax?

But an accountancy fee for, say, an employee, is still not allowable against tax. There are specific rules as to what is allowable and what it's allowable against. A legal fee for an abortive purchase isn't a trading expense (legal fees for purchase are never an allowable trading expense against rental income). It's capital. Because there's no asset, there's nothing to set it against. It's just lost money due to the abortive purchase - there's no tax relief available against lost money due to abortive purchases. You can't compare it to other things because other things are specifically allowed by virtue of tax laws or precedent.

legepe

OK understood... thanks... Pennywise