Cost of adopting a road - Revenue or capital? | AccountingWEB

Cost of adopting a road - Revenue or capital?

I am looking at a case where the client owns a number of properties in different areas. For one of them there are included costs of having the road adopted during the last year.

My initial thought was that this was capital and not allowable against the letting income, but in due course on the ultimate sale in the CGT computation.

Having done a little more research it would appear that these costs are probably repair costs payable to the council adopting the road to bring it up to standard for them to then take on responsibility for maintaing the road that was originally the responsibility of the owners. This being so it seems more likely that the costs areĀ  repairs and should be allowable against the rental income.

The costs do not exceed income and a profit will remain for the year, albeit reduced on previous years.

Do others have any experience of having argued this point with HMRC, or any views on which side of the line the expense falls?

There are 2 comments. Login or register to view them.

Make up of payments

neileg |

Would believe this is capital

Nevill |