Are loan arrangement fees allowable

Are loan arrangement fees allowable

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I have a client hwo has a few but-to-let properties, and on the arrangement of the mortgages the client incurred arrangement fees.

The IR is claiming that this is a cost of arranging finance is a capital cost which should be added to the cost of the properties and that relief will be given on the eventual disposal of the property.

Is this correct?

Thanking everyone who responds

Madhu

Madhu Morjaria

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By User deleted
06th Nov 2007 13:51

Incidental cost of finance
So far as I am aware arrangement fees for borrowing are allowable as "AN INCIDENTAL COST OF FINANCE".

If HMRC are refusing the allowance ask them to specify, what in their view, qualifies as "An incidental cost of finance" and perhaps refer them to :-

http://www.financeandtaxtribunals.gov.uk/decisions/documents/spec%20comms/SPC00302.pdf

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