Valuation Fee/Rental asessment

[cris2fer]

I did not want to hijack another thread but i wanted to query a answer made by Karongo in which he correctly said that the

Valuation fee is not allowable as an expense, they are part of the cost of acquiring the property.

I assume this will be added to the cost of the property when calculating CGT.

My question is if the pruchase of the property fails and you do not buy it you then cant claim it back when you sell it so is it then possible to claim it another way in your tax return.

Thanks cris2fer

[Tax Accountant]

I did not want to hijack another thread but i wanted to query an answer by Karongo in which he correctly said that the Valuation fee is not allowable as an expense, they are part of the cost of acquiring the property.

I assume this will be added to the cost of the property when calculating CGT.

Yes. Same with solicitor's legal and disbursement costs.

However, any loan arrangement fee is part of the cost of raising finance and is an allowable expense against rental income.

My question is if the pruchase of the property fails and you do not buy it, you then can't claim it when you sell it. So is it then possible to claim it another way in your tax return.

If the purchase of the property fails, you haven't bought the property and therefore there is no property to sell at the end of it.

Basically, this is called 'abortive cost' and there is no relief for this as you did not acquire any asset as a result of it. As there is no chargeable asset, there cannot be any CGT losses to use against any gain from another transaction.

Just to make it clear, you cannot claim any property investment expense against any income from other sources. Any such expense can only be claimed either against rental income or in the calculation of Capital Gains Tax. If the expenses exceed the income or gains, you have a loss which has to be set off against rental profits from other properties, or capital gains from sale of any other assets in the same year. If any loss still remains, this is carried forward and used against rental profits or capital gains of later year(s).

Thanks cris2fer

Hi Christopher,

See answers above in red. I hope this answers your query, and more.

Ramnik

[cris2fer]

Thanks for the reply :)

cris2fer

[Tax Accountant]

Thanks for the reply :)

cris2fer

You are welcome.

Ramnik