Mark McLaughlin looks at the deduction of costs for capital gains tax purposes on the disposal of an investment property by an individual.
For capital gains tax (CGT) purposes, in determining a gain (or loss) when an individual disposes of an asset such as a buy-to-let investment property, certain incidental costs can normally be deducted in calculating the taxable gain (or allowable loss), in addition to the cost of acquiring the property.
Incidental costs generally fall into several categories: costs of acquiring the asset; enhancement expenditure; costs of establishing, preserving or defending title to (or rights over) the asset; and costs of disposal. However, not all costs are tax deductible; certain criteria must be satisfied. This article focuses on the final expenditure category – incidental costs of disposal.
Is it allowable?
To qualify as an
