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CGT question re allowable property cost

Practical Issues
scrumpyjack
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CGT question re allowable property cost

#342777

Postby scrumpyjack » September 25th, 2020, 1:29 pm

My daughter is selling her rental property. A year or so ago she bought a new dishwasher, which is not now deductible in any way against rental income.

She is now selling the property, including the dishwasher. Can the cost of the dishwasher be treated as part of her acquisition cost of the property?

Trivial I know, but 'every little helps'!

dealtn
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Re: CGT question re allowable property cost

#342797

Postby dealtn » September 25th, 2020, 2:44 pm

If you are selling the property that includes such "chattels" you can have a property price of, say £198k, and the other items as £2k, and ask the solicitors to draw up as such.

The buyer can (in ordinary times) save stamp duty too.

scrumpyjack
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Re: CGT question re allowable property cost

#342812

Postby scrumpyjack » September 25th, 2020, 3:22 pm

dealtn wrote:If you are selling the property that includes such "chattels" you can have a property price of, say £198k, and the other items as £2k, and ask the solicitors to draw up as such.

The buyer can (in ordinary times) save stamp duty too.


I do realise that but it's not worth doing the paperwork for a £300 dishwasher!

bluedonkey
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Re: CGT question re allowable property cost

#342815

Postby bluedonkey » September 25th, 2020, 3:31 pm

If the dishwasher was a replacement of the previous one, then it would normally be an allowable expense against rental income under the category "replacement of domestic items."
https://www.gov.uk/guidance/income-tax- ... tal-income

scrumpyjack
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Re: CGT question re allowable property cost

#342817

Postby scrumpyjack » September 25th, 2020, 3:36 pm

Ok I'll check if she claimed it.

dealtn
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Re: CGT question re allowable property cost

#342829

Postby dealtn » September 25th, 2020, 4:05 pm

scrumpyjack wrote:
dealtn wrote:If you are selling the property that includes such "chattels" you can have a property price of, say £198k, and the other items as £2k, and ask the solicitors to draw up as such.

The buyer can (in ordinary times) save stamp duty too.


I do realise that but it's not worth doing the paperwork for a £300 dishwasher!


Ok but you didn't give details of what other items there might be that could be treated the same way.

I bought a £600k property with £25k of items as part of the transaction. If there was also fridge, freezer, washing machine, dishwasher...

JonE
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Re: CGT question re allowable property cost

#342844

Postby JonE » September 25th, 2020, 5:22 pm

scrumpyjack wrote:A year or so ago she bought a new dishwasher, which is not now deductible in any way against rental income.


If it was an integrated device then the first purchase of such would be a capital improvement to the property and the replacement of same would be an allowable repair to the property (in the same way that a replacement starter motor is a repair to a car). The costs of the initial acquisition would only feature in a CGT calculation if the house was sold with an integrated dishwasher in place.

That's one of the reasons I preferred integrated ovens and hobs rather than standalone cookers in furnished BTL properties when claiming the old 10% W&T allowance.

Cheers!

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Re: CGT question re allowable property cost

#342912

Postby Mike4 » September 25th, 2020, 11:17 pm

dealtn wrote:
scrumpyjack wrote:
dealtn wrote:If you are selling the property that includes such "chattels" you can have a property price of, say £198k, and the other items as £2k, and ask the solicitors to draw up as such.

The buyer can (in ordinary times) save stamp duty too.


I do realise that but it's not worth doing the paperwork for a £300 dishwasher!


Ok but you didn't give details of what other items there might be that could be treated the same way.

I bought a £600k property with £25k of items as part of the transaction. If there was also fridge, freezer, washing machine, dishwasher...


A possible downside of selling a house and splitting the sale price into two categories, property and chattels is that any (possibly first time) buyer getting a mortgage has to use up some of their precious deposit to fund the chattels. Thereby increasing the LTV of their mortgage and possibly making the deal unviable.


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