Expenditure when property first purchased

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    Expenditure when property first purchased

    Hi all,

    Apologies if this has already been asked but I have just purchased a rental property and we need to replace some items that are already in there.

    So carpets, cooker etc.

    The property will not be let fully furnished so no wear and tear allowance.

    Under the renewals principle am I able to claim the cost of the carpet etc as a renewal or is this considered to be the first time I purchase it therefore not deductible.

    My thinking is that I have already purchased the item when I bought the property. This may not be correct though!

    Thanks!

    #2
    Renewals basis was always a concession (ESC B47) and this has been withdrawn from 6 April 2013.

    All that remains, for unfurnished lettings is section 68 ITTOIA 2005 which is entitled "Replacement and alteration of trade tools".

    Section 68(3) ITTOIA 2005 defines a "trade tool" as " any implement, utensil or article.". My initial reaction is that a carpet does not fall within that definition - however, others do not agree with me. HMRC class them as "small tools" - but that is just their interpretation.

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      by reluctantlandlord1976
      Thank you Gordon, didn't see your response this afternoon. I will look at this with fresh eyes tomorrow as it's late now.
      I've put some figures in my reply to a post just now but answers below to your questions.

      a] £80k Jan 2021 sale price.
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      08-12-2021, 00:55 AM
    • Caught out by changes to Capital Gains Tax
      by reluctantlandlord1976
      I appreciate 'ignorance' is no excuse, however there are some mitigating factors, i.e. due to illness etc.

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      06-12-2021, 13:51 PM
    • Reply to Caught out by changes to Capital Gains Tax
      by reluctantlandlord1976
      Andrew, apologies only just seen your post [was it awaiting approval did you say?] answers are:

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      08-12-2021, 00:41 AM
    • Reply to Caught out by changes to Capital Gains Tax
      by reluctantlandlord1976
      JP Keates
      I wasn't aware that refurbishment deductions only applied in terms of letting out the property. On the CGT calculator it asked 'How much have you spent on improvements since you became the property owner'.....

      Here's the timeline:

      March 1982 - 1992 3 Owners,...
      07-12-2021, 18:01 PM
    • Reply to Caught out by changes to Capital Gains Tax
      by reluctantlandlord1976
      JP Keates et al - thank you very much for your assistance. I have this afternoon emailed an accountant to try and get an appointment urgently. I hadn't realised it was all so complicated and it was remiss of me to not be aware of the CGT changes made in 2020 due to not renting out the property. Thanks...
      07-12-2021, 17:28 PM
    • Reply to Caught out by changes to Capital Gains Tax
      by jpkeates
      Refurbishment while you were living there is only allowable against CGT if it was solely and exclusively for the business, so if it was to prepare the property to be let, it would be OK.
      If it was simply to improve what was then your home, it fails the basic test.

      Get yourself to...
      07-12-2021, 16:22 PM
    • Reply to Caught out by changes to Capital Gains Tax
      by AndrewDod
      The probate resets a lot of the stuff, but my main response was unapproved
      07-12-2021, 15:36 PM
    • Reply to Caught out by changes to Capital Gains Tax
      by AndrewDod
      You are really short on detail:

      Date (year & month) bought in joint names ______ (what % was yours then)
      Date it converted to your sole name ______ (presumable date of death of parent 2?)
      Declared vale at probate _________
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      07-12-2021, 15:33 PM
    • Reply to Caught out by changes to Capital Gains Tax
      by reluctantlandlord1976
      We were all joint owners. Bought it with parents. I lived there for 10 years before buying own home. I became sole owner upon their deaths. Rented out since 2007-2019. Empty last two year as trying to sell. Hence I was off the landlord radar. I am now extremely worried by your statement that refurbishment...
      07-12-2021, 14:53 PM
    • Reply to Caught out by changes to Capital Gains Tax
      by AndrewDod
      Let us know the exact timescale and money involved year by year - I am sure some kind person (or even myself) with do a calculation for you so that you can assess the risks involved
      07-12-2021, 14:33 PM
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