Expenses claim fails

The taxpayer sold a property in 2006 after renting it out as a furnished letting for many years.

She claimed some £2 000 for expenses under TCGA 1992 s 38 and s 39 incurred in preparing the property for sale in her 2006/07 self assessment tax return. The figure included the fee paid to her tax adviser. HMRC refused to allow the expenses so the taxpayer appealed.

The First-tier Tribunal said that for the expenses to be allowable under s 38(1) the expenditure had to lead to an identifiable change in the state of the property.

In this instance there had been no such change to the property so the expenses did not fall within s 38(1).

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