renovation costs

StaffieLad

Since 2018 my 2 partners and I have purchased 3, 2-bed flats. 2 of them required modernisation and we contracted a home improvement company to to bring them up to rentable standard paying approximately £26,000 for the work. The 3rd property required no work and was let immediately. We are now considering selling the properties and expect to make aaproximately £35,000 profit on our original investment. 

If all 3 properties sell in the 2024/25 tax year our combined CGT allowances amount to £9,000.   

StaffieLad

I hadn't finished this post - how do I edit it?

arthurdick

Hi, look at your post, in the top right hand corner you should have 3 little dots, click on those to edit or delete.

pumas

pre-empting your query
Government website -https://www.gov.uk/tax-sell-property/work-out-your-gain

StaffieLad

Thanks for your comments.

@arthurdick, unfortunately there is no ellipsis showing against my post!! Is it because I'm a Newbie and therefore haven't got editing permisssion, I wonder?

Albermarle

StaffieLad said:

Thanks for your comments.

@arthurdick, unfortunately there is no ellipsis showing against my post!! Is it because I'm a Newbie and therefore haven't got editing permisssion, I wonder?

Could be. I think you maybe need 10 posts to become a 'full member' .

StaffieLad

My questions are:

1. Can we offset the renovation costs as a capital cost against the potential gain? Our plan would be to ensure that the properties are maintained/restored to the same standard as our original renovations.

2. We are tenants in common owning equal shares and are likely to be sold with sitting tenants. Can the gain be split in different proportions to reflect the unequal amounts we originally invested?

caprikid1

I see no reason with the expenditure being allowable capital expenses... so long as you have not claimed any of it against the rent in the first year.

One of the reasons Tenants often have such poor property is when a Landlord holds a property long term he has no route to claim any tax back on any "Improvements"