Removal of conservatory - tax deductible against rental profits?

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    Removal of conservatory - tax deductible against rental profits?

    Hi everyone,

    It's that time of year ...

    Any views please as to whether I can claim the cost of removing an old conservatory against my rental profits? The background is that I bought a property a couple of years ago with an old wooden conservatory attached. The conservatory was already in poor condition, so I let the property out with the tenant happy to have use of the conservatory on an "as is" basis. Time passed, and it became clear that the wooden frame had rotted so much that the conservatory couldn't realistically be repaired, and I was concerned that it might become a danger to the tenant. So with the tenant's agreement I hired a builder to remove the conservatory and make good the patio where it had been by laying new flags, etc.

    All well and good. My question now is whether I can claim the cost of removing the conservatory against my rental profits? My argument is that the primary motivation behind removing the conservatory was to maintain the rental business by keeping the property safe, rather than to improve the property. Also, my understanding is that if I had replaced the conservatory with a new UPVC one then I could (is this right?) have claimed this cost on the "nearest modern equivalent" basis, in which case it would seem odd not to be able to claim the cost of simply removing the conservatory and not replacing it. But I haven't found any definitive guidance either way on this point.

    Also, if I was to decide that the cost was deductible, how is the best practical way to deal with this in my tax return if the point isn't 100% clear? Should I include a note explaining what I have done and why, so that if HMRC were ever to challenge the deduction then at least I would have been open and up front about my reasoning?

    Many thanks.

    #2
    You are responsible for ensuring the safety of your tenant living in your flat and I think the cost of removal must be an allowable expense against rental income.

    Comment


      #3
      Thank you, Gordon999.

      Comment


        #4
        On the basis the conservatory was removed as it was a hindrance to letting of the property, you have grounds to claim the expense a deduction from rental profits. Your case is similar to the Samuel Jones case in the following HMRC guidance, where a chimney was removed partly for safety reasons.

        https://www.gov.uk/hmrc-internal-man...anual/bim35467

        As for disclosing the expense on your tax return - I'm a chartered tax advisor and I would not make a white space note on the return. You have reasonable grounds to claim the expense so I would not advise making further disclosure to HMRC.

        Comment


          #5
          Thanks very much, Sean, for such a helpful response. I'd done a lot of googling but hadn't come across that case before!

          Comment

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