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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 19925
Experience:  International tax
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I have a question relating to CGT on the disposal of a

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Hello again, I have a question relating to CGT on the disposal of a residential property from my father-in-law's estate.My FiL died in Jan 2015... leaving several properties. We are finally in a position to dispose of the final one - a flat.The flat was worth around £450k in Jan 2015. We (the executors) spent £50k renovating it just after the FiL died (he had been planning to live there, so we continued with the building work). His wife has been living there eversince.The flat is now worth around £550k. When we sell it, can we deduct the costs of renovating the property 3 years ago from the CGT bill?Thanks, James

Hello and thank you for allowing me to assist you.

When you work out your gain you can include the costs.

You can deduct costs of buying, selling or improving your property from your gain. These include:

  • estate agents’ and solicitors’ fees
  • costs of improvement works, for example for an extension (normal maintenance costs, such as decorating, don’t count)

You start with the market value and then adjust to include the costs of the renovation.

Customer: replied 10 months ago.
Hello, Thanks for the response, this makes sense to me.In terms of the improvement works, it was a full renovation - new kitchen, bathroom, floors, underfloor heating, etc. so I expect these types of things are deductible... whereas a simple repaint wouldn't be?Thanks, James

That is correct. Simply painting or redecorating is not a cost that is allowed.

You are most welcome.
A positive 5 star rating is appreciated so I am credited

Customer: replied 10 months ago.
Of course - thanks for your help

You are most welcome

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