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Payments were not professional fees but a non-allowable profit share on property disposal

By Mark McLaughlin, December 2023

A profit share paid for the introduction of an opportunity and assistance with the management of a property project was not deductible for capital gains tax purposes as an incidental cost on the disposal of a residential property. 

The first appellant (WB) knew another individual (SB), who was involved in the property sector. In 2014, SB told WB of a property he was interested in but was unable to buy himself because of ‘cash flow issues’. He offered to give the details to WB in exchange for a fee if he went ahead with the purchase. Nothing firm was agreed, but fees in the range of £10,000 to £15,000 were discussed. 

The appellants proceeded with the purchase (which completed in early August 2014). WB was in the early stages of cancer treatment at the time, and agreed with SB that the appellants would simply pay SB half the eventual profit on the transaction and SB would help as necessary with the oversight of the

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