CGT calculation - are original mortgage arrangement fees an allowable expense?

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    CGT calculation - are original mortgage arrangement fees an allowable expense?

    Hello, I have recently sold one of my btl properties.
    I have submitted my draft cgt calculation figures to my accountant.
    In my figures I have included an original mortgage arrangement fee of £1300.
    My accountant has informed me that the original fee is not an allowable expense for CGT puprposes.
    My understanding was that the orignal purchase costs were allowable expenses - solicitor buying fees, mortgage broker fees and mortgage arrangement fees etc.
    My accountant has informed me that the original arrangement fee was an allowable expense against rental income and should have been apportioned over the duration of the mortgage, so for example if the original mortgage was for 10 years then I should have claimed £130 every year on my annual tax return for 10 years.
    Is that correct?
    Can anyone tell me what are allowable expenses for CGT?
    Any advice would be appreciated.
    Regards
    John

    #2
    Your accountant is correct, the mortgage fees are finance costs (like the interest) and are subject to the restricted allowance against income.

    I don't know anyone who actually does apportion them over the mortgage term, but that is the correct treatment.
    Most people treat them as expenses as they're occurred, even though that's not technically correct.

    Capital expenses are limited to those directly associated with the actual purchase and sale (which will include legal fees) and any significant improvements that materially affect the value of the property.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Allowable expenses include solicitor's conveyancing fees , surveyors valuation & estate agent's charges for sale.

      Comment

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