Taxation of sinking fund contributions

Taxation of sinking fund contributions

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Hello

If a private leaseholder is contributing to a sinking fund, are those contributions deductible from income tax if that leaseholder is letting out their property on an AST? If not, is it deductible from CGT upon disposal of the property?

Thank you

Replies (5)

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By Paul D Utherone
27th Nov 2015 16:07

Depends whether it is used

for capital improvements or revenue repairs

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By dhjjessel
30th Nov 2015 14:21

It is being used for repairs only!

 

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By Paul D Utherone
30th Nov 2015 15:41

The tenants are putting aside monies

for repairs in the sinking fund.

It will be allowable when the repairs are made and the funds paid out of the sinking fund. At that point there will be allowable repairs to be claimed but no cost (one wold hope) because they have funds set aside in the sinking fund

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By dhjjessel
30th Nov 2015 16:14

Thanks - so should they be considered an expense when paid to the sinking fund or when spent from the sinking fund?

 

 

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By Paul D Utherone
01st Dec 2015 12:08

It depends whether

they can include an allowable provision for repairs under general accounting principles or not.

If they can, yes. If it is only a general provision for future repairs, then no

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