Capital gains tax allowance or on tax return for new roof ?

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    Capital gains tax allowance or on tax return for new roof ?

    Hi,

    Can anyone help on this ? ive recently sold a property and in the process of submitting my CGT calculation, (yep 30 days deadline im aware of)

    Had to totally replace all roof tiles, batons and gutterings including fascias ect ( and before anyone points it out YES we did get evertyhing done with a BDGS control insepection )
    Basically this was as there were some issues with the roof , fascians needed replacing . However , now the house looks amazing so it seems to have gone up in value -

    Also had replacement /repair of the drive to a better quality from a gravel to stone -

    Obviously these have raised the value of the house -

    Wasnt sure if these are allowable expenses for the Capital gains tax or revenue ?

    Tenants said 'I would like a new dive as there are weeds growing though the existing gravel ' so i spent a lot and just got a new one with paving stone

    Roof /fascias - surveyor pointed out fasicas needed repair and tiles were slipping here and there -
    Roofer said might as well get new roof and fascias rather than repair as its all looking a bit like it needs -

    So who knows ???

    Read somewhere that you may be able to do half /half as its half repair (general maintenance) half improvement -

    Survey - 95,000 , purchased at 75000 but next doors went for 65000 sam kind of property - bad area ex council someone got killed opposite in a fights onlly last week

    My CGT will be about 1,000 but as im a low earner my wages are only 8000 plus rental income 4000

    Thanks


    #2
    The capital gain is calculated from ( sales proceeds ) minus ( purchase cost plus improvement cost )

    The cost of "new drive with paving stone " can be counted as part improvement ( cost can be apportioned ).

    The cost of "re-tiling roof" can be counted as part improvement ( cost can be apportioned )

    The annual capital gains allowance is £12,300 ( no tax charged below £12,300 )

    Comment


      #3
      Thanks -!

      New roof was 6500 in total, for total re-tile and remove wooden fascias , renew gutters
      I think the drive was about 1,500

      I have 95,000 minus 75000 - giving 20,000 minus the 12,300 total taxable 7,700 take off the solicitors fees say 7000 -

      How would I apportione the costs of the roof and drive - 3250 and say 750 ??

      Was thinking of calling the tax office to double check - obviously being a low earner with little rental income this year would be more beneficial for me ...

      Comment


        #4
        Here is my suggestion, if you hold a receipt for £6500 paid for re-tiling the roof.
        If it was simply a repair job, the work would have covered at most 10 % area of the roof by re-fixing loose tiles and replacing missing tiles.
        So I would apportion £1500 as maintenance work and £5000 as improvement. work

        For the driveway, you paid receipt paid for £1500 : I would apportion say £500 as maintenance work and £1000 as improvement work . Only you can decide on this matter.

        If you are not confident claiming higher proportion for improvement work and then choose to apportion "half / half".

        Comment


          #5
          It is hard to see that a roof replacement is a capital expense, unless there was no roof before.

          Perhaps the driveway if it really is replacing no driveway with something entirely different and new.

          Comment


            #6
            Agree the difference between operating expense and capital expense is " hard to see".

            But if OP wants to minimise the capital gains tax bill, then OP must have some justification. I believe the minimum repair cost is "operating expense" and the extra cost is treated as an improvement cost which can be claimed as capital expense. An accountant may find reason to apportion 100% cost to capital expense .

            Comment


              #7
              Originally posted by Gordon999 View Post
              Agree the difference between operating expense and capital expense is " hard to see".

              But if OP wants to minimise the capital gains tax bill, then OP must have some justification. I believe the minimum repair cost is "operating expense" and the extra cost is treated as an improvement cost which can be claimed as capital expense. An accountant may find reason to apportion 100% cost to capital expense .
              No that's just an attempt at tax fraud. Minimum repair cost + "extra" only applies if something very different (adjusting for time and changes in design) replaced the original. If you replace a wire fence by a brick wall one, then yes.

              But not if you replace a wooden fence by another wooden one, and then say that all the expense over and above replacing it with wire is "capital".

              Very very hard to see how that would apply to a roof.

              Comment


                #8
                hi

                I have had a word with a specialist at HMRC (not just a call handler a specialist ) she said to proportion the roof as follows -
                Total roof replacement - all tiles and all batons - felt ect to take that off the CGT - as everything was improved to a higher standard

                But allowing some figures for 'repair' which we can use the replacement of the fascias - and replacement of gutters ect

                The reason for this it has brought the property to a higher standard and has improved its value -

                As Gordon correctly said I can always do half half

                luckly the builder has done the calculation and broken it down for me -

                Even the tax specialist said that a re-roof is always a difficult area

                It will be ablout 4,000 take off figure for roof - rest will be other repair


                Comment


                  #9
                  I have just found my receipt for the drive - it was for 900 pounds this was becasue a pap did it - i dont think i will even include this in my calculations - but ill put it on my tax return as a 'repair'

                  Comment


                    #10
                    here is the breakdown from roofer -

                    To apply for building control 160
                    th erect scaffold all round property with chutes ect 645
                    to strip off all roof coverings down to spares
                    to fix over fascia trays tom eave
                    to felt roof with breathable felt
                    to batten roof with breathable battens
                    to tile roof with concrete tile type choses
                    to fix bonding gutter
                    to fix gutter
                    to fix dry hip system to hips with matching ridges and block end ridge
                    to fix dry hip system to hips with matching ridges and black end ridge
                    to fix dry main ridge system with matching ridges
                    to renew lead work around chimney . new lead slate to soil pipe

                    3,370

                    to remove old wooden fascia and soffit board and remove
                    to mreplace with white upvc fascia and soffit all round property
                    to renew gutter to new fascia board
                    to removed old rwp and replaces with black upvc

                    grind out and point chimney pot

                    596
                    414
                    137
                    96


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