Buying agent commission - offset against CGT or income?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Buying agent commission - offset against CGT or income?

    Hi there everyone. New here and looking forward to some good chats.

    I've bought a couple of properties through Choices Acquisitions, an agency who negotiates discounts from developers and private sellers. The commissions are quite hefty, though I should be making enough in instant equity not for this to be a problem. My question is: what can I offset these commissions against? I would ideally like to offset against income so I can have the benefit now. However, it could be argued that the commission is part of the purchase price, and therefore only offsettable against CGT when I sell. I don't plan to sell so that wouldn't be much good to me.

    I have also paid them a signup fee (some of you must be thinking I am a complete mug, but hey). This I guess must be offsettable against income since the fee isn't associated with any particular property.

    Thanks,

    Mark

    #2
    Commission's deductable only against CGT I suspect Mark.

    Are you sure this firm are bona fide? What you describe sounds suspiciously like those 'property clubs' that held BTL seminars a few years ago.

    edit: What do you know, I was right: http://www.theguardian.com/money/200...eyinvestments2
    To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

    Comment


      #3
      I agree it takes balls and cold blood to put your trust in these kind of organizations and it's not for everyone.

      The only property I have exchanged on so far is a newbuild flat at the Panorama in Ashford which, even with their commission cost me about £100k, at least £15k cheaper than the off the street price, so I think in this case the fee is justified. Completion next year or I can sell it on before then and take the profit.

      I've paid out a larger commission for a big HMO in Headingley, and here I am slightly concerned whether I've done the right thing. If the figures are what they say they are I'll be getting a 12% yield for it, in which case it surely must be BMV. Will find out shortly.

      Thanks.

      Comment

      Latest Activity

      Collapse

      • Recent tax return
        by Ailers
        Hi, new here, sorry if this has been asked already but I can't find the answer.

        I have just completed my tax return for 2020/21 as a landlord with a few properties. My income was 22k and my outgoings (maintainance, ground rent, insurance, mortgage payments etc) was 18k. The mortgages are...
        24-01-2022, 22:42 PM
      • Reply to Recent tax return
        by jpkeates
        I suspect that you completed the return incorrectly.
        25-01-2022, 09:30 AM
      • Reply to 50/50 ownership versus rental split
        by AndrewDod
        Yes (if you are spouses)
        Probably wise to use a lawyer
        CGT not relevant as you can freely transfer between spouses for CGT purposes (even shortly before a sale)...
        25-01-2022, 08:52 AM
      • 50/50 ownership versus rental split
        by Deeks67
        Hi guys , I have recieved some inaccuratre advice ( not from this site ) RE ownership and rental income split . my wife and I have 2 unemcumbered properties which are renting out , the first started renting in Oct 2020 and the second started in July 2021 . Both properties are in joint names 50/50 (...
        25-01-2022, 06:24 AM
      • Tax return
        by pchaure
        Hi
        New to this, buy to let property got in 2018 but renewing took time and COVID hit. Rented out since Dec 2020. I had Electrical work done completed in 2019, as had no income I had not filled in self assessment. Can I claim it in this tax year?
        24-01-2022, 19:05 PM
      • Reply to Tax return
        by jpkeates
        If it was first let in December 2020, the costs allowable against income prior to that take place on the first day of the first tenancy for tax purposes.

        So, if you mean can you claim it on a tax return for April 2020 to April 2021, the answer is yes.
        You can't claim it for this tax...
        24-01-2022, 21:10 PM
      • Advice
        by jhoggard
        Hi,

        I currently have a property rented out in my own name with a fair bit of equity around 50% LTV this is actually a repayment mortgage which i'm looking to switchover to a interest only. When i do this i'm also taking money out of the property to put towards another which i'm looking...
        20-01-2022, 14:25 PM
      • Reply to Advice
        by SouthernDave
        I started my limited company a year before buying the first property, then bought a second 2 months later, a third 3 months after that, a fourth 5 months after that and so on to where I am now. Our lenders have never said they want a separate company per property. Ive never heard of that, if it were...
        23-01-2022, 17:40 PM
      • Reply to Advice
        by jpkeates
        I don't think we disagree.

        The OP has one property and is looking to buy a second.
        At that point in that business, lenders will want a company per property.

        There's a point where that ceases to be the case, when the portfolio gets big enough, or, presumably when someone...
        23-01-2022, 17:34 PM
      • Reply to Advice
        by SouthernDave
        i concur with James, once you get over 4 properties, they consider you to be a portfolio landlord and want to start seeing cashflow forecasts before lending to make sure the company is buoyant. Directors guarantees each time but no limits on number of properties or number of dofferent lenders.
        23-01-2022, 16:50 PM
      Working...
      X