Letting agent fees: is it an allowable sale expense?

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Letting agent fees: is it an allowable sale expense?

Question:

I sold my property mid-way through an academic year. I had signed up with a letting agent for the whole of the year and they charged me for the six months remaining on the contract even though I did not own the property or receive the rent. Will this be an allowable cost of sale expense for capital gains tax purposes, or will it be included in my final letting statement for the property?

Arthur Weller replies:

These are post-cessation expenses. If you look at HMRC’s Property Income manual at PIM3000, you can see that they are allowable firstly against post-cessation receipts. If that is not possible, these expenses are deductible against income and capital gains of the year in which the expense payments were made. The time limit for the claim is a year after 31 January after the tax year in which the payments were made.

I sold my property mid-way through an academic year. I had signed up with a letting agent for the whole of the year and they charged me for the six months remaining on the contract even though I did not own the

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This question was first printed in Business Tax Insider in February 2020.