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  • Tax

    Capital Gains Tax Expenses

    We recently sold a BTL and are compiling the accounts.

    Not done this before, so along with the usual buying/selling/build costs, are there any other costs we can claim?

    The property was a project that took 2 years to complete and I was project managing.

    Thinking about travel/fuel costs, food/drink?

    Not sure if there is anything I may have missed or could claim for (with or without receipts) or on a petty cash basis for coffees etc?

    Thank you all and wishing you all the very best for Christmas and the new year ahead Smile

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    May be worth paying a tax accountant for CGT submission

    Assume as project manager you logged all outgoings on a spreadsheet?

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    It looks like you are trading and if that's the case CGT will not apply .You will be taxed as earned  income instead

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    I agree with Don. If the property was sold shortly after completion of the construction work you are likely to have realised a trading profit. You should seek advice from a tax adviser.

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    If it really is a capital gain, the allowable costs need to relate to capital expenditure (ie things with enduring benefit). So when you say fuel were you driving to B&Q to pick up bricks for an extension of just visiting the property for purposes of securing rent. Ongoing day to day stuff is likely items which would reduce annual profits but you can't get relief twice.

    Broadly speaking any works to the property are likely to be capital, particularly if you acquired it in an inlet table condition. If these are improvements not repairs then there's a good chance it's allowable against capital gains.

    However like others above it sounds like it was a trade in buying improving and selling property - just your first of potentially many. Like manufacturing - raw inputs such as land, bricks, mortar, sweat and tears - to get something of more value which is sold. Capital gains is for investment income generating assets. Which do you have - trading income from your first development or rent from an investment?

    Much will rest on your intentions?

    I suggest you engage an accountant to get to the bottom of this. It will be an expensive mistake.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022