Spray foam insulation removal tax position

user1977

Note this is a thread from last year confusingly resurrected by @kKev - it was the OP who asked the tax question but I presume have got their answer (and hasn't logged in here since November).

SonnyLumiere

Olinda99 said:

I agree with bookworm - if the rental business was still running you could have got away with claiming it as a repair expense against rental income

you will now have to claim it against cgt - the worst that can happen is that they disallow it.

"could have got away with" = fiddle your tax return - bad idea.
"the worst that can happen is that they [HMRC] disallow it! - No, if subject to HMRC enquiry, they will also pay interest and (prob) penalties.

Bookworm225

user1977 said:

Note this is a thread from last year confusingly resurrected by @kKev - it was the OP who asked the tax question but I presume have got their answer (and hasn't logged in here since November).

ooops
I noted April
I didn't pay much attention to the day. and utterly failed to clock it is no longer 2024!

Olinda99

SonnyLumiere said:

Olinda99 said:

I agree with bookworm - if the rental business was still running you could have got away with claiming it as a repair expense against rental income

you will now have to claim it against cgt - the worst that can happen is that they disallow it.

"could have got away with" = fiddle your tax return - bad idea.
"the worst that can happen is that they [HMRC] disallow it! - No, if subject to HMRC enquiry, they will also pay interest and (prob) penalties.

not even remotely true

robatwork

kKev said:

Good afternoon. We're thinking of buying a property which has sprayfoam insulation. The vendor has the documents from the installation Inc, guarantee which is insurance backed, invoice/ receipt, product info and installer details. 
The product is Lapolla open cell. 
The installer is Protec Insulation Services. 
It was paid for by the Green Homes Grant scheme. 
Apparently Lapolla has ceased trading. 
Protec's website is unobtainable,  their various telephone numbers are not in service. The Lapolla foam has a BBA certificate reference. When I've contacted BBA they say the certificate is withdrawn. 
The roof is in good condition and the sprayfoam doesn't worry me as such, but I'm concerned about any future sale either by us or by our sons after us.

You should have started your own thread as this one is about the somewhat niche issue of the tax position of spray foam.

Anyhow your insurance policy seems pointless on a couple of grounds.

Firstly even if it was valid, what exactly is insured? Probably the actual spray foam but what about resulting damage 10 years later from trapped damp? Doubtful.

Secondly as you've found, a policy backed by non-existent company(ies) is worthless.

Arguments still rage over whether spray foam insulation is a good idea, a bad idea, or the devil's own pajamas. All moot if the banks won't lend on houses with it, it's by definition a bad thing. 

mybestattempt

Olinda99 said:

SonnyLumiere said:

Olinda99 said:

I agree with bookworm - if the rental business was still running you could have got away with claiming it as a repair expense against rental income

you will now have to claim it against cgt - the worst that can happen is that they disallow it.

"could have got away with" = fiddle your tax return - bad idea.
"the worst that can happen is that they [HMRC] disallow it! - No, if subject to HMRC enquiry, they will also pay interest and (prob) penalties.

not even remotely true

@Olinda99

@SonnyLumiere is correct.

If HMRC did make an enquiry and the expenditure was disallowed then, because a incorrect return was made, the additional tax (because it wasn't paid when due) would attract interest and also penalties may be assessed.

SonnyLumiere

Olinda99 said:

SonnyLumiere said:

Olinda99 said:

I agree with bookworm - if the rental business was still running you could have got away with claiming it as a repair expense against rental income

you will now have to claim it against cgt - the worst that can happen is that they disallow it.

"could have got away with" = fiddle your tax return - bad idea.
"the worst that can happen is that they [HMRC] disallow it! - No, if subject to HMRC enquiry, they will also pay interest and (prob) penalties.

not even remotely true

Olinda99: I've seen you give good advice on some general areas, but I've noticed that you often give bad/wrong advice when it comes to HMRC / Tax. I'd recommend that you don't comment on these matters, as I don't think you have the relevant experience or expertise. Meanwhile, have a read of the HMRC online technical manuals and, for a quick summary:

https://www.rossmartin.co.uk/penalties/6448-penalties-capital-gains-tax

Olinda99

thanks for your suggestion which I agree to

That said, I can only post as per my experience interacting with HMRC of over 20 years . I have on a couple of occasions had expenditure disallowed by HMRC which simply necessitated changing my return with no penalties or interest

In general, provided it is not all out blatant fiddling, I have found HMRC to be helpful rather than punitive. In my view there is absolutely no chance of them 'opening an inquiry' and 'charging penalties' if you claim something against a revenue account when it should be against a capital account

Anyway, going forward I will keep off tax matters