Is tax advice tax deductible?

I took a bit of financial advice and subsequently ran it by a tax barrister for an eye watering (to me anyway) sum. Is that tax deductible? Or are only regular accountancy fees tax deductible?
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  • baser999
    baser999 Posts: 1,075
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    If you’re self employed and it’s business advice then I’d say it was deductible. If it’s part personal/part business then apportion the cost 
  • It would depend on the tax involved, different rules apply to what can what can be claimed as deductions from employment income, self-employment income, capital gains etc.

    What tax is involved and what financial/tax advice was given?


  • Mrs_pbradley936
    Mrs_pbradley936 Posts: 14,567
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    edited 10 January at 3:47PM
    It would depend on the tax involved, different rules apply to what can what can be claimed as deductions from employment income, self-employment income, capital gains etc.

    What tax is involved and what financial/tax advice was given?


    It is to do with if we have a business partnership (or not) and that impacts if we have to pay stamp duty. I looked it up online, ran it by my accountant and was still confused so I paid the barrister. The issue being we are not taxed as a partnership but that does not mean we don't have one. The partnership act is old and predates most banking and accountancy laws. We did not want to let it all sail though only to find a hiccup in a few years and pay penalties. 
  • What is the nature of the business, what type of income does it generate?

    What transaction are you concerned might attract stamp duty?

    I doubt very much whether the cost of seeking advice about whether a partnership exists would be allowable but more detail about the business would help to clarify.
  • Grumpy_chap
    Grumpy_chap Posts: 14,392
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    This is clearly not a straightforward case given the OP has paid both an Accountant and a Tax Barrister for advice.  One of those professional advisors will be far better placed to assess whether the fees incurred can be accounted as tax deductible expenses or not.
  • It sounds like two individuals (e.g. a husband and wife) jointly owned property and the technical question was whether that amounted to a general partnership or not.  The reason that is relevant is because relief from SDLT is often available on the transfer of the property to a company on the incorporation of a partnership.  The company having the rental business is presumably better because of the restriction on tax relief for individuals on interest payments.

    If that is the case, I can't see that tax relief is available (either as individuals jointly owning the property or via the partnership).  This is because those professional fees are not for the purpose of the rental business.  HMRC explains its position here: https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2120

  • Grumpy_chap
    Grumpy_chap Posts: 14,392
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    It sounds like two individuals (e.g. a husband and wife) jointly owned property and the technical question was whether that amounted to a general partnership or not.  The reason that is relevant is because relief from SDLT is often available on the transfer of the property to a company on the incorporation of a partnership.  The company having the rental business is presumably better because of the restriction on tax relief for individuals on interest payments.

    If that is the case, I can't see that tax relief is available (either as individuals jointly owning the property or via the partnership).  This is because those professional fees are not for the purpose of the rental business.  HMRC explains its position here: https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2120

    But, surely, the two professionals that have been engaged would not only answer the question very quickly but, if their fees are tax deductible, the professionals would have mentioned that benefit.  I know my Accountant assesses his own fees and says what is, or is not, tax deductible as a matter of course and includes that in the submissions that are filed.
  • I agree that this maybe a situation as More_complicated_than_that has outlined, hence my questions to the OP to establish if that is the case, particularly in the light of her earlier threads concerning a FIC and rollover relief.

    If it is jointly owned property being transferred to a company then the comments the cost of advice are agreed, they are not allowable tax deductions.

    I also agree that the barrister and accountant should be able to explain why. 

    Even if it's a different scenario I don't believe they would be allowable but there might be a different reason.


  • Jeremy535897
    Jeremy535897 Posts: 10,372
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    Most of the times I dealt with barristers, they never commented on the deductibility or otherwise of their fees. In this case the barrister is likely to be an expert on partnership and property law, rather than tax law. The accountant should be able to offer an opinion, however.

    For what it is worth, any advice on structuring trading businesses, let alone property ownership, is likely to be disallowed on the basis that it is capital (but won't add to the base cost).
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