Tax treatment of an early repayment charge due to a sale

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    Tax treatment of an early repayment charge due to a sale

    I'm selling a mortgaged property and there will be an early repayment charge due. Should this be treated as a finance cost (deducted against income tax, albeit subject to the finance cost deduction restrictions) or an incidental cost of sale (deducted against CGT)?

    #2
    The early repayment charge is a "penalty cost" for breaking the mortgage scheduled payment dates.

    But if this penalty cost is incurred to achieve an earlier sale date and appears on your completion statement , you could argue it becomes part of the sale cost ( like legal costs and estate agents costs ) .

    Comment


      #3
      I've done a bit more digging and according to this post it appears deductible only as a finance cost:
      http://property-tax-advice.co.uk/Blo...tax-deductible

      grateful for any further views

      Comment

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