Capital Gains Tax - Allowable Expenses

Loll10
Loll10 Posts: 17 Forumite
Second Anniversary 10 Posts Name Dropper
edited 22 September 2024 at 4:16PM in Deaths, funerals & probate
It's now 21 months since my father's death and we’re close to completing on the flat sale. The kitchen and bathroom needed a complete renovation to be able to find a buyer. I’ve done some research on the rules for this with CGT and that part is clear.

There will be a deferred sinking fund service charge of £12K which will be paid at the point of completion. This fund is used for repairs of the building, including the lift, door security etc. As these are repairs of existing items or replacing like for like items then I’ve considered it as not an allowable expense.

What about a new addition to the building?
Thames water has reduced the pressure to the whole building meaning the top floor is just a trickle. You will not be surprised to learn that they kept this a secret when querying the low pressure but have finally admitted it. It was done to reduce the volume of water lost through leaks and that the building management should install a new booster pump instead. It's being contested but won’t be resolved before sale.

The residents agreed to install a booster pump and each flat has to pay a portion of the cost. The management company informed me that I had to pay £800 for our share before the completion of sale. It’s within their rules to spread the cost of repairs between residents if their sinking fund can’t cover it. I have paid the bill.

As this is a new addition, would it be an allowable expense?

Thanks.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 349.8K Banking & Borrowing
  • 252.6K Reduce Debt & Boost Income
  • 453K Spending & Discounts
  • 242.8K Work, Benefits & Business
  • 619.5K Mortgages, Homes & Bills
  • 176.4K Life & Family
  • 255.7K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.