Confused newbie

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    Confused newbie

    Hi group

    New to this so please take it easy on me!
    I've had some advice from a friend of a friend and where I thought I was clear now i'm not so sure?
    I'm in the process of buying a house from my grandfathers estate, jointly with my Dad. I'm on way with quotes for changing the old single glazed units which are in a poor state of repair, a nice new combi to replace the 22 year old back boiler, soffits, some facias, fire, fire surround, decorating, kitchen, bathroom replacement etc. I was advised to hang fire on all of this and move a tennant in as it stands then look to improve it, this way i can offset the expenditure as revenue. However, i've looked and can't see any reference to this particular 'loop hole' but lots of ref to allowable expenses. Most of which i think my expenditure is? I need to come to a decision to (a) repair and make good now or (b)stop everything and move someone in, also i need some figures to convince my father of this if I choose option (b). I.e. we'll save x amount if we do it this way around. BTW rental income anticipated to be between £5k and £6k per annum, and could spend as much as £9.5k on refurb and bringing to BTL market, all considered.

    Many thanks for any help you guys choose to pass on.


    Your friend of a friend is correct.

    If I were you, I'd do all absolute essential repairs now (or temporary repairs) then get your tenant in. Hopefully your tenant will allow you to do the other work as it will benefit him/her. If not, wait till the person moves out and then do the works.

    The most important thing is that your property has 'entered' your letting business before doing the works. You can then offset against revenue.


      Thanks Claymore
      Is it as straight forward as all expenses or none depending on which way I do it?

      I'm really concerned i don't get the right kind of tennant in with the property the way it is now, and when i try to do improvements and charge them the full rent they may not play ball irrespective of what they say now?

      Am i over analysing this?


        You can't claim it as an expense if the property has not 'entered' the letting business. The property will not enter your business until your first let.

        You could charge a reduced rent for an agreed period of time and then, when all repairs have been done, agree the new rent. I'm sure if you agree this in advance with your tenant they would be OK with this.


          Can be of use:


            Thanks all, thats really helpful.
            I do have several repairs which are either dangerous not to fix straight away before letting i.e. single glazed non safety glass below 800mm, ventilation for the back boiler, RCD on the DB etc. or are simply in too bad a state of repair, e.g. single glazing where the windows looks like its going to drop out. Also given the reduced rent and the potential offset of circa £1000, (£100 pcm discount for 12 months would more than offset any reduction in tax) it may not be worth the hassle. Not to mention fitting brand new carpets then having them pulled up to fit pipework for the new combi. Any benefit can only at best be at the margins surely?
            Whilst i'm convinced that in some circumstances this is a no brainer to do it, i'm not sure it is for me given my property.


              one of our flats- already rented out needs a new boile- constantly failing. When I replace this witha new like for like will it be fully tax deductable?



                Yes,it seems to be a repair rather than an improvement.


                  I am no great expert and stand to be corrected on this but I would have thought that:

                  a. Most of the repairs described would be capital rather than revenue on the basis of dilapidation and assuming that the price paid reflected the condition of the property.

                  b. Whether the property was tenanted or not would not matter anyway, since any revenue items would be allowable as pre-trading expenditure.
                  There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.


                    Any authoritative clarification on this? I wouldn't have thought that moving a tenant in would make any difference. If I am sadly misguided then please advise.
                    There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.


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