Period of Administration - CGT

Period of Administration - CGT

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Hi There.

I was wondering if anyone can help. I am finalising a CGT computation for a period of administration. The disposal is a sale of a residential home. I have been provided with incidental cost of disposal i.e. legal fees, estate agents fees etc. Can i also allow a further deduction under SP2/04 - expenses incurred by Personal Representatives for cost of obtaining title to assets. Or is it only one or the other??? I can't find a solid answer anywhere!!! Could anyone kindly shed some light on this matter. Kindly appreciated.

Neelali33

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By johngroganjga
14th Jul 2016 14:48

What sort of costs are you talking about? What expenses did the personal representatives incur in obtaining title to the residential home?

It's certainly not either / or. The incidental costs of disposal are deductible regardless of what other costs may be available to be deducted.

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Replying to johngroganjga:
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By neelali33
14th Jul 2016 15:30

sorry... let me rephrase this. What I am actually referring to is the cost of obtaining probate. I have been provided information from the solicitor that list probate cost relating to the main residence. I thought a deduction can be claimed of the actual cost of obtaining probate or alternatively a deduction can be taken for a fixed percentage using the scale rates in SP 2/04. My question was if I get this deduction in addition to incidental cost.

From your previous response I am understanding that this expense will be additional to the normal incidental cost.

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By Andp
15th Jul 2016 12:38

https://www.accountingweb.co.uk/any-answers/capital-gains-personal-repre...

please see link above - my question earlier this year. I recall spending hours researching "costs of establishing title ". In the end phoned HMRC Trusts and Estate helpline for confirmation , then submitted the return .

My understanding of the figures needed for your calc - allowable incidental costs PLUS a further deduction under SP2/04 -

Ensure you discount probate legal fees, surveyor costs and inheritance tax return overheads.

Also interrogate lawyer purchase invoices to ensure it is only "land law services " you are including in incidental costs . Herein lies some our confusion as often the same firm will undertake the conveyancing and probate services and only issue one non detailed fee note !

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By Andp
15th Jul 2016 12:43

sorry forgot to add - ensure deduction under SP2/04 is greater than probate cost , then discount probate cost.

A further anomaly is what are "probate" costs. Not always clear from vaguely written fee notes i.e some lawyers invoice separately for services in relation to drafting the oath and IHT services - some lawyers do not.

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Replying to Andp:
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By neelali33
15th Jul 2016 13:15

Andp Thank you very much for your concise and detailed response. Fully understood now. Much appreciated. Thank you for your time.

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By Andp
15th Jul 2016 13:26

pleasure

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