First Time Landlord

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    First Time Landlord

    Good afternoon all,

    I am just about to move into my partners house, with the intention of renting out my own house in April / May time. Whilst I have done my own research and read some of these forums, I just wondered if anyone could provide a bit of advice.

    I am just about to get my en suite remodelled, a long planned renovation, which based on my research could potentially be a CGT write off when i come to sell the house? Is this correct?

    My main question however relates to my 21 year old boiler. It is quite noisy but gets serviced every year and I am always told it is still ok. I was thinking it might be worth getting it replaced before i rent, as i know full well at that age it'll go at some point and i have read that some boilers don't meet new EPC requirements. From a tax efficiency point of view, if i waited until it went wrong would that then be classed as a "repair" and become Income Tax deductible? Would pre-emptively replacing the boiler be a bit wasteful, especially doing it in a tax year when my house is my primary residence?

    Any advice on this matter would be very much appreciated.

    Kind Regards

    Last edited by Bristol_newbie; 08-02-2021, 13:21 PM. Reason: Boiler, Tax

    If you move into your partners house (and genuinely do that, not just say that it's happened), the property stops being your main residence.

    That has two effects.
    Your liability for CGT changes, because residential relief ends.
    You can make changes to the property to prepare it for business which qualify for tax relief because the expenses will be solely and exclusively for the business, because you get no other benefit from them.

    For tax purposes, the expenses are deemed to have happened on the first day of the first tenancy (when your business actually begins).

    Replacing the boiler would be an allowable expense (essentially the same as a repair) because it's classed as maintenance. You don't have to wait for it to break to make it allowable for tax purposes.

    The bathroom may be the same.
    If one bathroom is being replaced with what's essentially a newer version of what's there, it's maintenance.
    HMRC accept that a new bathroom will be better than an old one, without it being a capital improvement.
    If what's being done is materially better and improves the value of the property in a meaningful way - so you're replacing an avocado bath and toilet with a wet room and making the room bigger, some of the expense is maintenance and some would be capital.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


      Provided you have GSC then your 21 year old boiler might be more reliable than a new one, especially if it's a traditional system boiler with separate immersion so even if it breaks they can still have hot water.
      The next few years will likely see innovative new heating systems to cope with the imminent ban on new gas boilers.



        thankyou for taking the time to provide such a comprehensive reply. That definitely clarifies my situation, very helpful.



          Contact an accountant re your CGT The situation seems to have changed radically in April 2020 They can also advise on your other tax issues
          Worth the c £200 which can be set against income tax as an allowable expense.


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