Hello there
A client of mine has some rental properties. All small value at £42,000.
One of the properties was badly damaged, he received nearly £18k from the insurance company - only spent £6 on repairing it, as he hires a handy man who is very cheap!
My question is twofold:-
1) Do the insurance monies of £17k and the cost of £5k go into the accounts, giving a taxable income tax profit of £12k? and
2) Do I then need to do a part disposal calculation ? Ive run the figures through, the capital gain would be only £2k ish - but then takes the cost brought forward of the asset down to £25,000.
ANY help on this will be gratefully received as I have never had to deal with insurance payouts before !
Thanks again !
Replies (1)
Please login or register to join the discussion.
Refer to the manual
http://www.hmrc.gov.uk/manuals/cgmanual/CG15700+.htm
I think your situation falls in the CG15710. You don't have an income profit though.