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    • wheelz
    • By wheelz 4th Feb 18, 3:00 PM
    • 332Posts
    • 61Thanks
    wheelz
    Lease extension and tax
    • #1
    • 4th Feb 18, 3:00 PM
    Lease extension and tax 4th Feb 18 at 3:00 PM
    I have extended the lease of my flat last year and am preparing for the next tax return. I understand that if your lease extension is for more than 50 years you can't claim the legal costs (against rental income) but it's a capital expenditure. I don't know what to do with that. Does that mean I can't claim full stop or somewhere else on the form? Do I 'need' to do anything/fill anything in on my tax return to do with this lease extension. My reason for extending it was that it was going under 80 years.
Page 1
    • anselld
    • By anselld 4th Feb 18, 3:04 PM
    • 5,964 Posts
    • 5,700 Thanks
    anselld
    • #2
    • 4th Feb 18, 3:04 PM
    • #2
    • 4th Feb 18, 3:04 PM
    You can claim it against Capital Gains Tax when you come to sell.
    • wheelz
    • By wheelz 4th Feb 18, 3:21 PM
    • 332 Posts
    • 61 Thanks
    wheelz
    • #3
    • 4th Feb 18, 3:21 PM
    • #3
    • 4th Feb 18, 3:21 PM
    Does it not matter that the lease extension was done a different year to the sale of the house? Lease extension last October, sale of flat this year (most likely after April).
    • wheelz
    • By wheelz 4th Feb 18, 3:22 PM
    • 332 Posts
    • 61 Thanks
    wheelz
    • #4
    • 4th Feb 18, 3:22 PM
    • #4
    • 4th Feb 18, 3:22 PM
    The fees I can claim, are these the surveyor's fees, legal/solicitor's fees but not the money I had to pay towards the Freeholder's costs? Or are those costs included as well?
    • 00ec25
    • By 00ec25 4th Feb 18, 4:34 PM
    • 7,229 Posts
    • 6,926 Thanks
    00ec25
    • #5
    • 4th Feb 18, 4:34 PM
    • #5
    • 4th Feb 18, 4:34 PM
    The fees I can claim, are these the surveyor's fees, legal/solicitor's fees but not the money I had to pay towards the Freeholder's costs? Or are those costs included as well?
    Originally posted by wheelz
    those are all costs associated with the lease extension. The lease extension is a capital cost and therefore they form part of your overall capital cost

    have you really not researched how CGT works, yet you are a LL planning to sell?

    basics: https://www.gov.uk/capital-gains-tax
    • wheelz
    • By wheelz 4th Feb 18, 5:24 PM
    • 332 Posts
    • 61 Thanks
    wheelz
    • #6
    • 4th Feb 18, 5:24 PM
    • #6
    • 4th Feb 18, 5:24 PM
    Yes I have researched that information on the gov.uk website. But I simply thought lease extension fees etc coming tax year and sale of house most like the following year. It's not clearly set out in the information on gov.uk where these legal fees come under. Losses?? Anyway, I'll worry about it when I get to doing the tax return for that. It will probably become clear as I go along.
    • anselld
    • By anselld 4th Feb 18, 5:52 PM
    • 5,964 Posts
    • 5,700 Thanks
    anselld
    • #7
    • 4th Feb 18, 5:52 PM
    • #7
    • 4th Feb 18, 5:52 PM
    Does it not matter that the lease extension was done a different year to the sale of the house? Lease extension last October, sale of flat this year (most likely after April).
    Originally posted by wheelz
    All the costs (Lease Premium, Freeholders fees, your fees) can be offset against CGT the year in which you complete the sale, and only then if you have sufficient capital gains to set them against.

    It doesnt matter what year they were incurred.
    • wheelz
    • By wheelz 15th Sep 18, 2:40 PM
    • 332 Posts
    • 61 Thanks
    wheelz
    • #8
    • 15th Sep 18, 2:40 PM
    • #8
    • 15th Sep 18, 2:40 PM
    I hope you don't mind me reviving this thread. For the capital gains and lease extension I'm probably gone seek help from a tax adviser. Do I understand it right that capital gains tax can be/is done separately from tax return? Next tax year (18/19) I should haven't to do a tax return as no longer have rental income. I was about to do the tax return for the tax year 17/18 for which I had rental income. Does that make sense to split it up as I can do this this tax return myself while I probably need advice for the capital gains bit. Or is it there somehow a disadvantage if I split it up?
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