Property Licence

Deductible costs..

Didn't find your answer?

Hi all,

Have a situation where a client is charging a business for a licence to walk over his drive way, there is no exclusive use for either party. Other than the legal costs for the agreement, are there any other deductible costs? I assume it is not possible for any interest deduction, but can't think of any others.

Many thanks

Replies (2)

Please login or register to join the discussion.

paddle steamer
By DJKL
17th Jul 2018 11:14

Cannot think of that many costs., but do consider the undernoted from HMRC:

"The expenses incurred in connection with the first letting or subletting of a property for more than one year are capital expenditure and therefore not allowable. The expenses include, for example, legal expenses (such as the cost of drawing up the lease), agent’s and surveyor’s fees and commission. Expenses for a let of a year or less can be deducted."

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2120

My only non tax caveat (and your mention of legal fees gives some reassurance) is I certainly would never grant anyone access rights over a property I owned unless I was absolutely certain, backed up by legal advice and professionally prepared documentation , that I was not leaving myself open to the other party acquiring rights that might later be hard to extinguish; there are odd areas like agricultural land, telecoms, utilities where nasty things can happen.

Thanks (1)
Replying to DJKL:
Slim
By Slim
17th Jul 2018 11:25

Thanks DJKL, you are absolutely right, luckily the client has taken legal advice on this, paid for by the licencee as you are right it can be a can of worms..

The licence can be terminated with one months notice, and will just roll on until this happens or the property/land is sold.

Thanks (0)