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Sam, Accountant
Category: Tax
Satisfied Customers: 14189
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have three related questions relating to expenses incurred

Customer Question

I have three related questions relating to expenses incurred managing my pension investments. These investments are all outside of any pension scheme or SIPP and all are related to property (shares in hotels, storage units, developments etc). I guess you would call them unregulated.
1. Ecohouse - Brazilian social housing (criminal scam) - I may get principal back through section 21 claim but I have incurred (during FY 2014-15) several thousand £ in legal fees - how and at what stage can I claim these as a capital loss?
2. I attempted to buy an apartment in Paris. The agent took non refundable commission up front, I expended legal advice fees, I paid deposits to the French Notaire. The agent and his mortgage brokers after 12 months could not deliver the investment and the terms also changed making it unattractive. I called a halt, recovered deposits (which incurred a currency exchange loss). So an investment was never made but I spent £8,000 in the process. how and at what stage can I declare these as a capital loss?
3. A more normal expense - cost of research, inspections, advice etc as part of investigating a new investment or performing due diligence but then not proceeding. how are these expenses claimed?
From my experience of past 3 years - these kind of expenses are part and parcel of managing an investment portfolio and must in some way be claimable against investment related capital gains or income. I believe this is much more straightforward if I form a company but at this stage I have not and prefer not to incur this expense and effort if avoidable.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of thr experts on Just Answer, and pleased to be able to help you with your question. Your legal fees should have been claimed on your 14/15 tax return and you should seek to amend your return with HMRC. What expenses have you incurred in managing your pension investments? These would normally be allowable against rental income received. I do hope that I am helping with my replies.
Customer: replied 2 years ago.
Keith I tried to be clear in my question - did you read it carefully? There is no rental income. Other investments have produced income but the expenses I incurred do not relate to these. The expenses relate to failed investments - 2 criminal scams and one shyster who did not deliver the investment. I am looking for advice as follows:Of the 3 expense groups I listed:a/ which are claimable against other investment income; which are added to base cost of capital investment and so create a capital loss. Those incurred where no asset was purchased - are these simply unallocated capital losses?b/ when are each of these 3 to be declared or claimed - in the FY they were incurred or when the principal investment is concluded (sale or failure)I am not clear on whether an expense must be attached to a particular investment. I need a clearer response.........
Customer: replied 2 years ago.
I have owned a rental property and have traded shares - those expense and loss calculations are straightforward. The reason I ask for advice is that these recent expenses/losses are not conventional
Expert:  bigduckontax replied 2 years ago.
I am so sorry I should never have mentioned rentals. I regret to have to tell you that these expenses are money sunk and lost. They are not allowable against tax. I am so sorry to have to rain on your parade.
Customer: replied 2 years ago.
Not an acceptable response Im afraid . These are expenses incurred while investing. Two were actual purchases and so by normal practice these costs can be added to the base cost.
Expert:  Nicola-mod replied 2 years ago.
It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.
I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Customer: replied 2 years ago.
Thanks Nicola I can wait.
Expert:  Nicola-mod replied 2 years ago.
We will continue to look for a Professional to assist you.
Thank you for your patience,
Expert:  Sam replied 2 years ago.
Hi I am Sam and am another of the UK tax experts here on Just Answer. For me to be able to assist please advise 1) The Ecohouse Investment - as this was a scam then I am afraid there is no claiming any of the costs you have spent lost in this false venture as there is no legitimate business/investment to offset those costs.2) Sam as Question 1- as this did not in fact proceed to a purchase, you have no investment/trade or business to offset these costs3) Please advsie what sorts of expenses you incurred and what amounts were involved but note, if allowable these would only be considered at the time of disposal of the relevant investment as a cost to buy.I await your replyThanks Sam