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Capital Gains Tax

Expenditure allowable against gain

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I have a client whose Mother left him and his two brothers a flat in London some years ago, it has never been rented as she still used it on her occasional visits to the U.K., she is a foreign national as are my clien't two brothers, only my client is a British national, domlilcied in England.  She has now died and the flat is being sold with a substantial gain.  The flat was a jount tenancy bewtween the brothers, but only my client has spent money maintaining it and for family reasons he has never re-charged his Brothers with any of the costs.  Obviously I will have to sort out what is capital and what is repairs etc., my question is, is all the capital expenditure he incured allowable against his gain or only 1/3, my instinct is that it is all allowable, but logic and taxes don't sit too comfortbaly together. 

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12th Nov 2019 11:15

I take the view that only he incurred the expenditure, so only he can deduct it. Therefore he should deduct 100% of it from his third of the gain. I am aware of no logic or tax law that would oppose that view.

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