What is tax deductible from getting property ready to rent - grey areas....

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    What is tax deductible from getting property ready to rent - grey areas....

    Hi All. I'm new here.
    I have been letting a property for the last 3 years and the tenants have just moved out. Sadly they didn't leave it in a very good state and it needs complete refurbishment before I can rent it again.
    I am aware that I can claim against the revenue for the paint, emulsion, damaged pane of glass, and missing bath panel. I am a little confused over the kitchen and carpets though. Everything I've read said 'improvements' cannot be claimed back. It definitely needs a new kitchen and carpets before I can let it out, but a new kitchen and carpets throughout are clearly going to increase the property value and 'improve' the property. These will be the biggest expenses of all - so can I claim on these?

    Also completely different questions - I lived in the property for several years before renting it out, and now it has just gone over 3 years allowance so will one day be liable for CGT. I spent £14k buying my ex out at the top of the market in 2006, then continued to live there for a few years. Will the £14k which was added onto the mortgage at that point be deductible, or will they expect me to pay CGT on this £14k aand only take into account the original amount myself and my ex bought it for?

    Any help much appreciated.

    #2
    If tenant damaged the place you should get costs from deposit and/or tenant, maybe needing court action..

    Is ph33 Lochaber?
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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      #3
      1. If the New Kitchen and Carpets are clearly improvements over existing items , you could charge 50% cost against revenue and record 50% cost as capital for future reckoning. The other items you mention are just repairs

      2. Your capital costs ( upto present time ) will be the Property Buying Cost + 14K Cost + 50% x Improvement cost ( Kitchen + Carpet )


      3. The period of "owner residence" + 3 years after moving out will be free of CGT. You can also claims lettings relief up to 40K so you may have a further 3-4 years renting before any liability to CGT

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