Remortgage costs...redemption penalties and CGT

[jonblair123]

Over the years of owning a property that has been rented out, umpteen remortgages have taken place and each time a remortgage fee was paid to the institution. Additionally, sometimes an early redemption penalty was also paid.
My question is, can these be offset against any gain on the property to reduce cgt?

[Tax Accountant]

Over the years of owning a property that has been rented out, umpteen remortgages have taken place and each time a remortgage fee was paid to the institution. Additionally, sometimes an early redemption penalty was also paid.
My question is, can these be offset against any gain on the property to reduce cgt?

Financing costs are an allowable expense of the lettings business.

They are not capital expenditure, nor improvement expenditure, and thus are not an allowable deduction in computing CGT upon disposal.

Ramnik

[jonblair123]

Financing costs are an allowable expense of the lettings business.

They are not capital expenditure, nor improvement expenditure, and thus are not an allowable deduction in computing CGT upon disposal.

Ramnik

Thanks for your reply Ramnik. I wish I had included these in my annual returns, but never mind.

[Tax Accountant]

Thanks for your reply Ramnik. I wish I had included these in my annual returns, but never mind.

If some of this relates to 2004-05 tax year, you can make an amendment by way of a letter to the tax office.

Or you can make an error or mistake claim. Easiest way is to include these in your current tax return and make a note of this in the ''additional information'' box. OK, so you will not obtain refund of any excess tax paid but you will create a loss which will reduce current and future tax on rental income.

[jonblair123]

If some of this relates to 2004-05 tax year, you can make an amendment by way of a letter to the tax office.

Or you can make an error or mistake claim. Easiest way is to include these in your current tax return and make a note of this in the ''additional information'' box. OK, so you will not obtain refund of any excess tax paid but you will create a loss which will reduce current and future tax on rental income.

Thanks very much for the tip Ramnik.You saved me a lot of tax.

[Tax Accountant]

Thanks very much for the tip Ramnik.You saved me a lot of tax.

You are welcome.

Ramnik