Allowable Expenses

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    Allowable Expenses

    Hi,

    Im a little new to the landlord world and am in the process of trying to work out everything tax related.

    I am trying to determine my allowable expenses and have a few questions hopefully someone canhelp me with:

    1) Can I deduct the cost of EPC, PAT, Electrical safety and Gas safety certs?
    2) I had to put a new carpet in prior to letting the flat - Would this be an improvement?
    3) As the flat is fully furnished I had to provide some additional furnishings - Notably a bed, a couple of matresses and a TV stand - Can I decuct any of these costs?
    4)I pay my contents insurance up front. In terms of deductions would I break the toal payable into monthly payemtns and multiply by the number of months the flat was rented during teh tax year?
    and 5) I pay ground rent (£50) half yearly. Would I approach the ground rent as a pro rata amount similarly to what I suggested for the contents insurance?

    Many thanks for your help.

    #2
    1. Yes.
    2. Did the carpet affect the price of the property if you bought it for letting? If so then replacement is capital, if you replaced it in the normal cycle of maintenance which is likely, then claim as revenue expense (google HMRC PIM2020 for more).
    3. No. you can claim for renewals only prior to Apr 2013, 10% wear and tear allowance thereafter.
    4. Claim from when you started the letting business. So pro rata if this was part way through the tax year.
    5. Same as 4.
    caveat emptor
    If it sounds like I know what I am talking about........I don't.

    Comment


      #3
      Thanks wight knight, that's a great help.

      Comment


        #4
        No problem. just to clarify point 3, prior to Apr 13 you could either claim for renewals only or 10 % wear and tear. From Apr 2013 its only 10% wear and tear. As your additions aren't renewals anyway you'll ust have to slowly recover the cost through the 10% wear and tear allowance.
        caveat emptor
        If it sounds like I know what I am talking about........I don't.

        Comment


          #5
          Originally posted by Wight Knight View Post
          No problem. just to clarify point 3, prior to Apr 13 you could either claim for renewals only or 10 % wear and tear. From Apr 2013 its only 10% wear and tear. As your additions aren't renewals anyway you'll ust have to slowly recover the cost through the 10% wear and tear allowance.
          Does this also apply to white goods? I bought a renewal oven/cooker and a new hood.
          Thanks.

          Comment


            #6
            It does apply to white goods unfortunately. Although not sure on appliances that are fully built in, will check.
            caveat emptor
            If it sounds like I know what I am talking about........I don't.

            Comment


              #7
              Mine aren't full built in - but as far as the hood - any hood HAS to be fixed, so does that count as built in even if it's not enclose within cabinetry?

              Comment


                #8
                10% wear and tear only applies to fully furnished properties, iirc, so OK for OP, but not in general.

                Comment


                  #9
                  Absolutely, thanks for pointing that out.
                  caveat emptor
                  If it sounds like I know what I am talking about........I don't.

                  Comment


                    #10
                    Any qualifying expenditure which was paid before the first tenancy starts is deemed to have been paid on the first day of that tenancy - there is a Time Limit of 7 years.

                    Another thing is that there is no requirement for the rental accounts to be drawn up to 5 April - another date might be optimum. However, time apportionment would be needed.

                    Comment


                      #11
                      Originally posted by King_Maker View Post
                      Any qualifying expenditure which was paid before the first tenancy starts is deemed to have been paid on the first day of that tenancy - there is a Time Limit of 7 years.
                      King Maker - do have a reference or link for that one? Just want to be sure before I invoke that rule in my tax return. Cheers.
                      caveat emptor
                      If it sounds like I know what I am talking about........I don't.

                      Comment


                        #12
                        Here is the link :

                        http://www.hmrc.gov.uk/manuals/pimmanual/pim2505.htm

                        Comment


                          #13
                          Many Thanks.
                          caveat emptor
                          If it sounds like I know what I am talking about........I don't.

                          Comment

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