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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15976
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I recently sold two flats, both within the same building. They

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I recently sold two flats, both within the same building. They were the only properties I possessed. One (the ground floor flat) was where I lived for the last 15 years, the other (the basement flat) I had a mortgage on and was let to a friend. The leases on both had reduced to 60 years. To sell them I paid £40,000 to extend the basement flat lease to !25 years while the person buying the ground floor flat also paid £40,000 to extend that lease, in addition to paying the relatively cheap purchase price. (He subsequently bought the basement flat too.)
My question is can I charge the £40,000 I spent to extend the basement lease against my capital gains?


The cost of extending the lease on the basement flat will be fully deductible from the capital gain you made on that property.

I hope this helps but let me know if you have any further questions.

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