Tax treatment of Property Purchase costs

[anselld]

Hi,

I have just purchased a BTL and I want to make sure I get the accounting right between capital expenditure and expense

I am assuming ....
purchase price
legal fees
electronic conveyancing fee
environmental search fee
land registry search fee
registration fees
SDLT Completion fee
stamp duty
... are all capital.

(1) What about Telegraphic Transfer fee? Is this finance charge (expense) or is it still capital since related to the purchase?

(2) What about my own CHAPS fee to transfer deposit and completion monies from my bank to my solicitor?

(3) What about the cost of new furnishings for the property. I know is is not an allowable expense but does it go down as capital?

(4) Likewise what about furnishings purchased from the vendor?


Apologies if these are all blindingly obvious questions but I have read three books with explanations on this and none of them make it absolutely clear.

Thanks in advance.

[TaxationPete]

Pre and Post Letting deductibles

http://www.hmrc.gov.uk/manuals/pimmanual/

http://www.hmrc.gov.uk/manuals/pimmanual/PIM2505.htm

Only fees directly associated to acquisition of the property. Costs of financing are not.

Regards Peter

[anselld]

Only fees directly associated to acquisition of the property. Costs of financing are not.

Regards Peter

Thanks Peter. Yes I read those too from one of your previous posts.

Perhaps I am being thick, but this is my first one so bear with me! In my examples 1 and 2 are they costs associated with finance (hence expense) or are they capital because they are associated with the purchase?

And if an expense is not deductable from income, eg buying furniture, is it therefore a capital expense to offset against future CGT?

[TaxationPete]

Check on these pages for Incidental Costs

http://www.hmrc.gov.uk/manuals/CG1manual/cg15250.htm
http://www.hmrc.gov.uk/worksheets/sa105notes.pdf
Regards
Peter