Deductible Items from calculating the capital gain

Hi all, according to the guideline: Deducting costs You can deduct costs of buying, selling or improving your property from your gain. These include: estate agents’ and solicitors’ fees costs of improvement works, for example for an extension - normal maintenance costs like decorating do not count You cannot deduct certain costs, like interest on a loan to buy your property. Since some items are not mentioned, I would like to clarify if the following can be deductible form the gain: 1) stamp duties when purchase the property 2) mortgage insurance cost 3) miscellaneous fee paying the solicitor for completing the transaction, like building plan fee

Hi
You can deduct the stamp duty costs and the solicotr fee.
The mortgage fee is not in relation to the actual sale of the property and is therefore not allowable.
You cannot deduct any outstanding mortgage either.
Thankyou.

Hello and sorry to pick up an old post, but it seems similar to my doubt. I have recently inherit a flat in Spain. In this particular case, the inheritance tax in Spain is quite significant so I would like to know if the following costs could be considered as deduction if I decide to sell the flat. Inheritance taxes associated to the flat paid in Spain. I know the taxes on Capital gains could eventually by offset, but would the inheratiance taxes increase the "purchase price". I also have to pay another tax in Spain, similar to the stamp duty. Would I be able to deduct it when selling the property? Finally, as per the description, I think legal fees (solicitor and notary) would be deducted. As a note, all those points can be deducted under the Spanish tax law. I would appreciate your help, Regards, 

Name removed admin .

Hi David Torcal,
There is no tax relief for the taxes in Spain other than Spanish Capital Gains Tax.
In the UK you may be subject to capital gains when you dispose of the property.
You would need to obtain the market value for the property on the day you inherited it and convert this to sterling using an exchange rate in use at the time.
The exchange rate is not set in stone, which is why you have a choice.
Under the terms of Self Assessment, we do not provide an official exchange rate and the onus is on the individual to use a just and reasonable exchange rate for each acquisition and disposal.
For your convenience, you can use any of the rate available here:
Exchange rates from HMRC in CSV and XML format
Or from another just and reasonable source. 
CG14200 advises how to computate and gain.
CG14200 - Computation: introduction
A list of incidental costs is shown here which can be deducted from the disposal value:
CG15250 - Expenditure: incidental costs of acquisition and disposal
Thank you. 

My parents transferred the ownership of their house (at zero cost) to my brother and me in 1992. Dad passed away in 1998 but Mum remained in the house (living there rent-free) until her passing at the end of Jan 2024. We are currently in the process of selling the house but I'm unclear whether capital gains will be charged on the final sale value (less allowances) or whether the sale value is reduced by the value in 1992?

Hi Dave Lumby,
Capital gains will be due if the value has increased since it was transferred to you in 1992.
The value at that time is classed as your purchase price (50%) 
Thank you. 

2 quick questions about deductions: Since the guidelines refer to solicitors costs associated with 'buying', does this extend to solicitors costs associated with 'receiving' a property in a will due to obtaining grant of probate. Guidelines excludes 'normal decoration', but there are physical costs which do not classify as decoration, such as accessing a locked propery, deinstallation of medical equipment and clearance of a property. How do these sit? Thanks

Hi WobagUK,
The solicitor costs of acquisition are allowable but you cannot claim for the entry or the clearance of the property.
Thank you.

Hello, I have a question. I am part of a residential management company made up of 4 flats. Another flat in the block has just bought into the freehold for £60,000 and that has been split between the residents of the management company individually. We are now working out our capital gains. We are trying to work out what we can deduct. Can we deduct the following : - a new path created to the building crica £3k -the original cost for the other flats buying into the freehold - for most flats this took place before they owned the flat -solictor fee to amend the residential structure after the freehold buy in Thank you

Hi,
Please have a look at CG15260 for allowable expenditure and CG15620 for specific examples of incdedental costs.  
CG15160 - Expenditure: categories of allowable expenditure
CG15260 - Incidental costs of acquisition and disposal: specific examples
If any of the expenses or costs occurred prior to ownership they will not be allowable.
Thank you.

My father passed a second property to my mother upon his death as detailed in his will. She has since sold the property for a capital gain. For the purpose of calculating CGT, is the cost of establishing title an allowable expense and can this cost be calculated as per the allowable expenditure detailed in CG30570? In this case I believe it will be 0.8% of the value of the property sold.

Hi ceeebeee1,
Yes,as you would need the title to allow the property to be sold.
Thank you. 

 

Hi HMRC Admin I'm looking to buy a property at auction and it will be a second home for renovation and resale. In the legal pack published by the auction house there are some specific charges I would appreciate confirmation they are/are not CGT deductible, please: - Specific Financial Charge against the property by the local council for necessary 'pest control' works completed. My solicitor advises me this charge will become payable buy me if I am the successful bidder/buyer. - Special conditions of sale include the Buyer being liable to pay the Seller's EPC and other search fees (totalling £750), £2,400 (inc VAT) contribution towards Seller's additional legal and admin costs, £4,800 (inc VAT) contribution towards Seller's legal costs, and £2,400 contribution towards Seller's auction fees. Thanks

Hi,
This forum is for general queries only and is intended to help you self-serve. We are unable to provide specific advice tailored to individual circumstances.
Please refer to the guidance:
Tax when you sell your home
Thank you.

I'm submitted a Capital Gains after the sale of a 2nd home and I'm trying to find out whether I can add the additional 3% stamp duty I paid at the time of buying a second property? I understand I can claim the stamp duty paid at the time of purchase, however at that time it was my only home, I then was fortunate enough to buy a second home to live in and keep and rent out my original property. However when I bought this new family home I had to pay an increased stamp duty, I think it was 3% more. Can I claim this additional Stamp Duty charge now that I have sold the original property and only have a single property remaining?

Hi Thomas,
Sorry no, as the additional stamp duty was on the 2nd home and not the one that has been sold.
Thank you. 

I propose to sell, are new drainage, new fencing and trees deductible from the gain?

Hi ,
 

Please refer to : CG15180 - Expenditure: enhancement expenditure   .

Thank you .

I bought a flat in London in 2012, but 18 months after the completion of the purchase, work in the basement flats done by the landlord created large cracks in the walls, marble floor, and lift—the building became unstable and unsafe. After a survey and legal proceedings, the landlord agreed to redo the flat and provide temporary quarters for several months. However, to obtain such, I had to incur legal and survey costs that the landlord refused to repay. Can I deduct those costs to calculate CGT?

Hi
Please look at this tutorial What allowable expenditure can I claim against Capital Gains Tax?