Expenses Allowed against Capital Gains Tax

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    Expenses Allowed against Capital Gains Tax

    Our son is selling his home after moving abroad. It was purchased in June 2015, lived in until April 2017 and then rented until March 2021. We are quite happy with the basic CGT calculation but have not been able to find definitive information on all the expenses that can be included. Can anyone direct us to a complete list? Or give any advice?
    Specifically we are thinking about:
    Mortgage arrangement fee when the house was purchased
    Remortgage fees - the house was let by then
    Early redemption fee. This is due in June 2021 and there will be no income in this tax year
    Council Tax & Utilities whilst empty and for sale. For this tax year only (last tax year will be expenses against income)

    Finally, does he need to notify HMRC that he is non-resident or is his absence for 3 complete tax years enough?
    Interestingly, our trial runs on the HMRC CGT calculator seem to give the same result if resident or not so we don't really understand the point of this.
    Thanks!

    #2
    Originally posted by AJM2 View Post
    Our son is selling his home after moving abroad. It was purchased in June 2015, lived in until April 2017 and then rented until March 2021. We are quite happy with the basic CGT calculation but have not been able to find definitive information on all the expenses that can be included. Can anyone direct us to a complete list? Or give any advice?
    The HMRC tax manuals are online.
    You need to be qualified to give "advice", which I am not.

    Specifically we are thinking about:
    Mortgage arrangement fee when the house was purchased
    Remortgage fees - the house was let by then
    Early redemption fee. This is due in June 2021 and there will be no income in this tax year
    Council Tax & Utilities whilst empty and for sale. For this tax year only (last tax year will be expenses against income)
    All of these are operational costs that can be offset against income and are not capital costs that can be offset against CGT,

    Finally, does he need to notify HMRC that he is non-resident or is his absence for 3 complete tax years enough?
    If he is non-resident for tax purposes, that needs to be a formal agreement with HMRC if he continues to receive income from the UK.
    Unless HMRC agree otherwise, anyone sending rent to a non-resident landlord needs to deduct tax at the basic rate and complete a twice a year return confirming that.


    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
      The introduction of capital gains tax for non-residents commenced in April 2015 and the "acquisition cost" would be based on the market value in April 2015.
      If your son. whilst still resident,bought the property in Jun 2015 , the acquisition cost for calculating capital gain would be the same for both resident and non-resident buyer.

      Comment

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