New landlord - what can be claimed?

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  • jpkeates
    The electric board is allowable as an operating expense.
    You claim it as though it was installed and paid for on the day the property is first let (which is how you account for pre-let costs like these).

    If you are adding a new kitchen, the item is a capital outlay and part of the CGT regime. If you are simply refurbishing an existing kitchen, it is a repair (operating) cost.
    By refurbishing something, you are obviously going to make it better, so there is a view to be taken, are you significantly adding to the value of the property or simply making a room up to date and in line with current expectations.
    If the former, it's betterment and has a capital allowance, if the latter, it's maintenance.

    You can't claim for your own labour time or cost against tax.
    You can get tax relief for the costs of tools.
    You can get tax relief for the costs of fixtures and fittings, but (probably) not free standing items like a fridge that's not built in.

    I'd do some research or find an accountant, as getting this right can be worth quite a lot of money.

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  • Impactive
    started a topic New landlord - what can be claimed?

    New landlord - what can be claimed?

    Situation: Buying a small property to let which needs some renovation work.

    1) Electric board - looks unsafe and some damage. Will get electrician to replace with MCB unit with proper RCD. Is this claimable?

    2) Planning to replace the bathroom and kitchen. I plan to do this work myself. I know new units/fittings are not claimable but can I claim for the tools as technically they're for maintenance. e.g. if I replace existing broken tiles I need a tile cutter.

    Also if the units are broken/damaged (e.g. the toilet is cracked) can I claim for replacement?

    I've read that the cost for new stuff like kitchen units can be banked away to offset against capital gains later when selling which is fine, but it's not clear which of my expenses I can claim as a pre-let fixing to make it safe/live-able property.

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  • tax / cgt question for renovating property
    by DroidEgg
    I purchased a shell of a house that was structurally sound but needed complete refurbishment. The house had been ransacked many items. eg All the radiators & copper pipe had been ripped from the walls.
    A builder completed all the work from start to finish. The final cost was an all-in job...
    02-07-2022, 10:33 AM
  • Reply to tax / cgt question for renovating property
    by Gordon999
    The underlying principle is that the cost of buying a property in good condition is clearly capital expenditure. Hence the cost of buying a dilapidated property and putting it in good order is also capital expenditure....
    02-07-2022, 17:21 PM
  • Reply to tax / cgt question for renovating property
    by dp17
    See the following property income manual, from HMRC , may be of some help.
    02-07-2022, 16:19 PM
  • Reply to tax / cgt question for renovating property
    by Section20z
    It may certainly be beneficial to allocate some of those expenses to running costs, electrical work required for the NEIC certainly is solely for the letting. Depends how much profit you are likely to make though, you'll have to do some sums .
    02-07-2022, 13:00 PM
  • Reply to tax / cgt question for renovating property
    by Gordon999
    If you purchased a building shell , and had the builder carry out the refurbishment work , then enter all expenses as an improvement in your records. You paid the builder by cheque and should have kept bank statements to show all payments .

    No need to break down the cost into operating...
    02-07-2022, 11:59 AM
  • Reply to tax / cgt question for renovating property
    by jpkeates
    I'd suggest that based on that description, all of the work was probably capital.
    02-07-2022, 10:43 AM
  • Reply to CGT query
    by Gordon999
    I believe your solicitor has to prepare a Deed of Trust which transfers 60 % interest in the property from wife to you.

    You need to make clear to your solicitor that Deed is for HMRC only and not for registration at Land Registry

    After signing the Deed , you...
    01-07-2022, 16:51 PM
  • CGT query
    by vik238754
    Hello. Since 2013 my wife and I own a property as tenants in common where the beneficial interest split is 90% her and 10% me. We are now looking to sell the property. I have a large CGT loss and using the HMRC CGT calculator I have calculated that if I change the split to 70% me and 30% my wife...
    23-05-2022, 19:37 PM
  • Reply to CGT query
    by vik238754
    The existing declaration states 10:90 beneficial interest not legal interest
    01-07-2022, 13:06 PM
  • Reply to CGT query
    by Gordon999
    The Declaration changing the beneficial interest to 70:30 is prepared only for showing to the Tax Office .

    The existing registration of 10% :90% legal interest at Land Registry does not change and the Mortgage Lender has already accepted this situation. .
    01-07-2022, 12:18 PM