In Babtunde Iginla v HMRC [2021] TC8081, the First Tier Tribunal (FTT) restricted the amount of costs allowable against a capital gain for lack of evidence but partially allowed the taxpayer’s penalty appeal.

In 2015/16 Mr Iginla sold a residential property declaring a capital gain:

“This payment shall be the full and final sum for the renovation works at the above address. As you are aware, preliminary works commenced on August 18th 2003 and all works shall be completed on or before the 12th of September 2003.“

The FTT found Mr Iginla to be a “less than straightforward witness” and his version of events to be “incredible”.


Records of capital expenditure may need to be kept for many years in case they are challenged by HMRC when the property is finally sold. This case also shows that a trip to the tax tribunal may leave the taxpayer in a worse position compared to simply accepting the figures provided by the District Valuer.

Useful guides on this topic

CGT: deductible expenditure
What expenditure is allowable for Capital Gains Tax (CGT)? What about loan interest, early redemption fees etc?

How to calculate a capital gain or loss
How do you calculate a capital gain or loss? What costs are deductible? How can losses be utilised against capital gains?

Property Business: Profits and losses
What is property income? How is it taxed? How are profits calculated? How are losses relieved? Is NI paid on property income? Is property income classed as a business activity?

Wholly and exclusively…toolkit
What does 'wholly and exclusively' mean? How do you determine if a cost is wholly and exclusively incurred for the purpose of a trade? What cases are there? 

Penalties: Deliberate Behaviour
Enhanced tax penalties apply in cases where a taxpayer's deliberate behaviour results in a potential loss of tax revenue

Penalties: Errors in Returns and Documents (subscriber version)
What penalties apply if you make an error or mistake? How are penalties calculated? How do you check penalties? What can you do if you receive a penalty?

External link

Babtunde Igninla v HMRC [2021] TC8081

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