Gifting a house and CGT.

AlexMac

ThisIsWeird said:

...I know she's spent a fair bit on it while it was rented - a boiler, fencing and decking, that sort of stuff. That's all 'maintenance', then, so not deductible?

Yes; I'm no expert, but I'd consider stuff like that as routine maintenance, given the summary guidance on the HMRC website about Property CGT:
"You can deduct costs of buying, selling or improving your property from your gain. These include:

• estate agents’ and solicitors’ fees
• costs of improvement works, for example for an extension (normal maintenance costs, such as decorating, do not count)..."

(when all else fails; RTFM, as the geeks say;
https://www.gov.uk/tax-sell-property/work-out-your-gain)

But presumably, in the past, when she was declaring the rental income to HMRC, she offset things costs like new boilers and other maintenance against the rent.  So she'll have paid tax only on the balance, so she's hopefully already enjoyed tax relief on those expenses?  And if she's not been declaring the rent, she's ahead anyway (given that you're "asking for a friend" I assume you won'y prejudice the freindship by accusing her of being a tax-dodger, lol?)

I've certainly added every maintenance, replacement or Service-Charge cost into my tax returns on a couple of BTLs we own.  This is really easy, as was the CGT declaration the only time I ever completed one (when we sold a holiday flat for a modest profit).  

ThisIsWeird

Thanks Alex.

It makes sense that these sorts of things are tax-deductible on an annual basis. I'll pass on the info from here, and leave it at that for her to investigate further.

Cheers, all.

Keep_pedalling

ThisIsWeird said:

Thanks all - yes, a first-world problem.

Interesting, km - I know she's spent a fair bit on it while it was rented - a boiler, fencing and decking, that sort of stuff. That's all 'maintenance', then, so not deductible?

No, but presumable she offset those costs against rental to reduce income tax at the time. 

ThisIsWeird

Keep_pedalling said:

ThisIsWeird said:

Thanks all - yes, a first-world problem.

Interesting, km - I know she's spent a fair bit on it while it was rented - a boiler, fencing and decking, that sort of stuff. That's all 'maintenance', then, so not deductible?

No, but presumable she offset those costs against rental to reduce income tax at the time. 

Presumably, and I imagine 'probably'. But I won't be asking - it's all a bit too involved and technical.