Do I pay CGT on a holiday let that was never completed?

I purchased a property 18 months ago on a Holiday Let mortgage. I live in a rental property. Basic tax payer and I don't own anything else. The property needed redecorating and modernising. However, it soon became apparent that the property was actually dangerous and would certainly not pass any checks for rental or holiday letting. A complete rewire was necessary. Secondly, the windows falling out of there frames when opened and being on the first floor they all needed replacing. In addition to this, a new kitchen and appliances were installed due to the need to rewire the kitchen so it was safe. We then divided the large living room with a stud wall to convert to a 2 bedroom. I have never let the property. If I sell I will make approximately £30k on purchase price (before any costs) but the costs of the work is in excess of £20k. I am so confused what I will end up paying in CGT if I sell now.

Hi Leannet77,
As the property was not your main residence during your period of ownership, Private Residence Relief is not available.
Re-wiring, new windows, kitchens, bathrooms etc, are normally considered as repairs and maintenance and do not normally qualify as a capital allowance.
The work to change the building, would qualify for capital allowances, such as the stud wall, re-wiring those rooms.
Where an asset was acquired for a value, significantly lower than the normal market value, because it is in a poor state of repair, then those cost of bringing it up to standard may be allowable as capital allowances.
Please have a look at the guidance here:
CG15150 - Expenditure: introduction
Onwards, re expenditure and enhancements.
Thank you. 


 

Hi Leannet77, if the property was deemed unsafe to occupy and required substantial works - you may be able to make a reclaim of SDLT paid also under the uninhabitable scheme - just a thought!