CGT - House sale, what expenses are allowed

Dr_Dr

Oct 2004 - My daughter purchased a house in London for 410,000 she lived there.
within a couple of years she built a roof extension for 35,000, she also completed a huge amount of renovations

Jun 2011 - she married and moved to her husband's house and rented out her house.
whenever she had a new tenant there were additional expenses (some redecoration, agents fees etc)
There were also other costs, boiler replacement, boiler servicing, some replacement of white goods, repainting outside plus visits to the property (she then lived 100 miles away)
Jun 18 - Alas the marriage had failed, she now has a child to support.
Aug 19 - she stopped renting out the property, and put it on the market.
Jan 20 - the property sold for 850,000.
So my questions are

- what expenses, if any can be included in the CGT calculation? can it include all the agents fees?

- If expenses are allowed does she need receipts for everything?
Any advice will be much appreciated

theartfullodger

Daughter should do a course on CGT: RLA or NLA do them. And/or -and preferred - buy a book.


With a profit in the hundreds of £ks, could she perhaps afford an accountant? Just a wild off-the-wall thought..


Understand it has sold: When was/is completion please? (Rules change 06/04/2020)

Dr_Dr

Completion was 06/01/2020.
I have told her to get an accountant, problem is finding one who knows all the CGT rules. If you know a good book please advise.
Thanks

00ec25

Dr_Dr wrote: »

Completion was 06/01/2020.
I have told her to get an accountant, problem is finding one who knows all the CGT rules. If you know a good book please advise.
Thanks

you certainly will not be able to advise her based on asking questions on a forum as it is clear from your questions that you have not given enough background for anyone here to be able to safely advise you, irrespective of what rules they may, or may not, know about CGT.
You have mixed up obvious revenue costs with capital ones, and have given no indication of which of those revenue costs were claimed during the rental

either she reads every word here
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual
and here:
https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2020
and here:
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim46900

or she pays an accountant. Property CGT is not that specialist and the point of paying a QUALIFIED accountant is they should (check for it) have professional indemnity insurance

Dr_Dr

Wow
Never having been in a similar situation (unfortunately) I agree that I am very ignorant.
Thanks for the guidance, we will read all those items.

POPPYOSCAR

00ec25 wrote: »

you certainly will not be able to advise her based on asking questions on a forum as it is clear from your questions that you have not given enough background for anyone here to be able to safely advise you, irrespective of what rules they may, or may not, know about CGT.
You have mixed up obvious revenue costs with capital ones, and have given no indication of which of those revenue costs were claimed during the rental

either she reads every word here
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual
and here:
https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2020
and here:
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim46900

or she pays an accountant. Property CGT is not that specialist and the point of paying a QUALIFIED accountant is they should (check for it) have professional indemnity insurance

Our QUALIFIED accountant did not know if the £40000 RR was for the property or per person.


OP I suggest you get a specialist Property accountant.

steampowered

Costs such as agent fees, boiler replacement etc. would have already been taken into account on your daughter's income tax bill. She can't count them towards the capital gains tax too.

00ec25

POPPYOSCAR wrote: »

Our QUALIFIED accountant did not know if the £40000 RR was for the property or per person.

OP I suggest you get a specialist Property accountant.

that is disappointing.

I have never worked for a small practice that does not have a tax support line to phone - lot easier than calling HMRC !

Any accountant trading for themselves really ought to have access to technical advice, even if it is "only" to phone their respective institute's advice line.

Dr_Dr

When calculating 2019-20 Income tax, your basic allowance is increased by any amounts paid into pensions and charitable donations.

If you also pay CGT on a property sale, you pay at 18% for any unused portion of your income tax basic allowance, and the rest at 28%. For the calculation (of the 18% part) does the Revenue take into account  the increased allowance (pensions + charitable payments) or does it use the normal 37,500 basic allowance?