Capital gains costs incurred - allowable ??

COMMERCIAL PREMISES SOLD – consisted of 4 units, all rented out to businesses I would like to know if the electric, water and rates costs for Unit 1 detailed here can be claimed: 1. Against disposal for capital gains calcs 2. Against rental income received 23/24 tax year against units 2,3,4 3. Cannot be claimed at all Unit 1 was rented out until 31.3.23. It was empty with no tenants from 1.4.23 until the whole premises comprising units 1,2,3 and 4 were sold Feb 2024 Unit 1 incurred electric, water and rates bills from 1.4.23 whilst empty and until sold Feb 2024 Units 2 and 3 and 4 continued to be rented out until sold Feb 2024 and the rental income and expenses for these will be accounted for on our 23/24 self assessment that we do.

Hi 

1. No these are not allowable. see CG15250 - Expenditure: incidental costs of acquisition and disposal  
2. yes claimable against rental income as it was the whole unit

Thank you

Thank you for your help .

Feedback .

With all units being sold in Feb 2024 there were some additional costs incurred on the solicitors completion statement that are causing query if they can be claimed against income tax, capital gains tax or not at all. We have looked at the CG15250 that you referred to in your answer above and are still not sure on the following numbered 1 - 3. 1. Indemnity insurance cost. The indemnity insurance covered a vehicle turning circle within the premises boundaries that the units are on and was requested by the buyer's solicitor. 2. A sum paid to the buyer on completion date in respect of roof repair works that will be needed on one of the units in the future. 3. Nine months rent refund paid to the tenants in one of the units by way of compensation because the buyer was becoming their new landlord and terms for them under the new landlord were different. These historic costs numbered 4 - 6 have never been claimed against income tax when renting out. Can they be claimed against capital gains on the disposal? 4. Land registry charges to register the mortgage back in the 1980's 5. Arrangement fee charged by the bank for the mortgage back in the 1980's 6. Valuation fee, not when sold in 2024 but paid to surveyors at the request of the bank in year 2002 because the bank wanted to monitor the current value at that time for secured lending purposes on the mortgage in the 1980's

Hi,
We can only provide general information / guidance in this forum.  
For an answer to a detailed question of this nature, you would need to contact our self assesment helpline on 0300 200 3310, contact our webchat
facility at Contact HMRC or seek professional advice.
Thank you.

Thanks for your reply. Unfortunately I have now gone full circle with no help. I started with HMRC Live Chat last week... they said I needed to contact the self assess helpline... I spent a very long time on hold this week, then finally got through to be told I needed to put a post on the FORUM.... and now you have sent me back to where I started ? This is very frustrating. I know this query does not fit into the yes/no answers from HMRC helpsheets which is why we are contacting you...we just want to get it right. 

Hi,
Unfortunately as previously stated, this forum is for general queries only, it’s intended purpose is to help our customers self-serve. Therefore, we are unable to provide specific advice tailored to individual circumstances. Customers with more complex enquiries often engage the services of a professional advisor or accountant and this may be something you wish to consider.
Thank you.

 

Hi,
There is no list of what is allowable and what is not, when it comes to capital expenses.  
This means that we can't confirm one way or another if something is allowable.  
We can point you to the guidance, so that you can decide for yourself if the cost is allowable.  
CG15150 (CG15150 - Expenditure: introduction) onwards.  
For example, replacing a roof is considered general maintenance and for capital gains purposes is not allowable, however, if the roof was changed to include windows, the purpose of the roof has changed and the cost is allowable.  
Unfortunately, you will have to decide what is or isn't allowable.
Thank you.

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