How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4959
Type Your Tax Question Here...
bigduckontax is online now

TaxRobinl have a client who has provided me with their

This answer was rated:

Hi TaxRobinl have a client who has provided me with their rental accounts for the period from 3rd November 2014 to 5th April 2015 from a property which they had purchased on 3rd November 2014.I would like to know whether they can include such expenses as landlord's registration fees, share transfer fee, stamp duty, land registry fees, solicitors' fees and proportion of service charge /Insurance premium for the period from 3rd November 2014 to 5th April 2015 as tax deductible expenses from their completion date of 3rd November 2014.
Many thanks
Hello Paul, I am Keith one of the experts on Just Answer, and pleased to be able to help you with your question. Which, surprisingly enough, has an excellent summary of the sort of expenses allowable against rentals viz: 'The most common types of expenses you can deduct are:water rates, council tax, gas and electricitymaintenance and repairs to the property (but not improvements)contents insuranceinterest on a mortgage to buy the propertycosts of services, including the wages of gardeners and cleaners (as part of the rental agreement)letting agents' feeslegal fees for lets of a year or less, or for renewing a lease of less than 50 yearsaccountant’s feesrents, ground rents and service chargesdirect costs such as phone calls, stationery and advertising for new tenantsThe expense should be incurred wholly and exclusively as a result of renting out your property.' I think that you will find that all the items of expenditure you mention are covered. Which's list, by the way is not exhaustive. I do hope that you have found my reply of assistance.
Customer: replied 2 years ago.
I thought so but I wasn't sure about stamp duty which was £40,000 on completion. Is that an allowable taxable deduction?
Well I do accept that that is a trifle dodgy and suspect that it might only be allowed against long term liability to Capital Gains Tax (CGT) on ultimate disposal. I would be inclined to exclude it as it will probably make a large loss in year one and inevitably lead to queries by HMRC,
Customer: replied 2 years ago.
Thanks. I was thinking the same thing but does that also mean the legal fees on completion and the Land Registry fees should not be an allowable taxable deduction?
Thinking along the same lines I agree; they are also included in the CGT computation long term.
bigduckontax and other Tax Specialists are ready to help you
Thank you for your excellent support. Don't forget to retain supporting evidence like receipts etc. You may need to keep these for years as your CGT position may not emerge for a long time.