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How to Account for Buying/Survey/Mortgage Costs


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Hi everyone,

So I'm self employed and I've always done my tax returns myself and I'm planning on continuing to do this with my first upcoming Buy to Let too if I can. 

However, how do I account for things involved in the buying process like the legal fees, survey costs and mortgage arrangement fees which aren't annual or normal running or maintenance costs to be expected year to year.

Do these costs still come off of the first years rent (reducing income tax)? Or do they get added up and saved for later when selling the property to reduce the liability for capital gains tax (even though there will likely be none-to pay if it doesn't grow any quicker year on year than the CGT allowance anyway)? Or are these dealt with in another way?

 

Cheers,

Joe

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  • 1 month later...
  • 1 month later...

Hi @joe brown

I agree with TaxAntics on this one.  The only extra thing I'd flag is that things like a sourcing fee (i.e. a one-off fee paid to a sourcing company) you might be able to put through revenue expenses as "Consulting costs" or something like that.  So that might help you get some expenses through as revenue expenses earlier.

I hope that's helpful.

Best regards

Rob

 

 

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Would a lenders valuation fee fall under revenue or capital expense? It's a requirement for the mortgage which makes me think it's revenue (tied in with the other financing fees) but given it's akin to a survey, perhaps it's a capital expense? Thanks

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