Tax relief on sale costs of rented property?
I was wondering if anybody knew the answer to the following scenario:
I will be selling my only rental property (thank you for this George Osbourne!). I will at first try to sell through this website with tenants in situ, but failing this I have read on the government website that in the dwell period between tenants moving out and property being sold (cessation of the business) you can carry on claiming tax relief on mortgage, expenses, repairs etc. what it doesn’t say is whether I can clam as expenses the selling costs such as estate agent commission and conveyancing costs.
Any information would be appreciated.
Dave
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Member Since February 2011 - Comments: 3453 - Articles: 286
2:01 PM, 24th September 2015, About 11 years ago
Hi Dave,
The sale costs you mention are a capital cost and not considered an expense.
Therefore they will come off your capital gain and not your income.
Member Since July 2013 - Comments: 463
8:57 AM, 25th September 2015, About 11 years ago
Hi Dave,
Other costs you can deduct from your capital gain include money spent on physical improvements to the property (repairs and replacement fixtures and fittings such as updating the bathroom sanitaryware should have been counted against income), and your initial costs of purchase: stamp duty, legal fees, mortgage fees, etc. You can’t claim against income or capital for consumables like washing machines, toilet bowl brushes, etc which are portable. You can find much more information if you search online, or see an accountant.
Member Since January 2015 - Comments: 21
9:51 AM, 25th September 2015, About 11 years ago
Reply to the comment left by “Tony Atkins” at “25/09/2015 – 08:57“:
Hi Tony,
Without being lazy, I never seem to have luck with Google searches. Do you by any chance have a link?
Comments: 6
10:18 AM, 25th September 2015, About 11 years ago
Thank you for your help
Member Since June 2015 - Comments: 193
12:12 PM, 25th September 2015, About 11 years ago
Reply to the comment left by “John Simpson” at “25/09/2015 – 09:51“:
Hi John
I would suggest that the first place to look is HMRC manauls on this which is quite helpful. http://www.hmrc.gov.uk/Manuals/pimmanual/PIM2510.htm
For more details speak to your accountant.
@Dave – the selling costs (agents, legals etc.) are part of the costs of the sale and are deducted from your sale proceeds when calcualting your capital gain.
Your accountant should prepare your CGT computation for the gain to be included in your tax return. If the property was your main residence at any stage then there are other reliefs that you can claim.
Member Since August 2013 - Comments: 108
10:14 AM, 26th September 2015, About 11 years ago
Hello Dave, why sell with tenants in ? you will probably not get maximum return and arranging viewings is tricky. The tenants will have the upper hand, ive been thru this nightmare, b2let investors need to factor in several months (but timescales range from two months in London to two years in Scotland) void to sell their asset but probably no one ever does allow for this.
Comments: 6
11:53 AM, 28th September 2015, About 11 years ago
Thanks very much Simon I just thought it might be better as I carry on receiving rent, maybe clean break is better?