Major works - allowable or not?

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  • JakubL
    replied
    Well spotted.

    The payment mechanism was available to me only because I was (and still am) living in the property as my main home. As the charge is significant, they allowed resident-leaseholders to spread it over a longer term (this was a pilot scheme in my borough in London).

    Buy-to-let leaseholders did not have this option and had to repay this charge within 12 months.

    As I will be moving out from my property, the scheme I signed up for allows me to continue repaying this over the longer term even when I will no longer be living in the property.


    Finally - thanks for confirming my thoughts on the allowable expenses.

    Leave a comment:


  • jpkeates
    replied
    It sounds like repairs to me, but the payment mechanism is a new one on me.

    Sounds like an interest free loan.

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  • JakubL
    replied
    Yes. The total bill of >£45k will be repayable in equal installments over 72 months. Therefore, for landlords this could be potentially beneficial as you do not have to book your charge in a single year, but you can split costs over the 6 years* (my mistake saying it was 7).

    Leave a comment:


  • jpkeates
    replied
    Could you explain "The charges will be split over 7 years to allow some repayment period to leaseholders".

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  • JakubL
    started a topic Major works - allowable or not?

    Major works - allowable or not?

    Hi,

    A flat which I will be letting out shortly had a relatively large major works charge applied to it (>£45k). The charges will be split over 7 years to allow some repayment period to leaseholders. Given the scale of the project, the nature of the works is varied, about 20% of the charge relates to fixing structural issues (recladding bricks really due to "reported" safety issues), with the reminder being largely accounted by redecoration/jet washing of walls/concrete repairs/replacing damaged balustrade frames, etc.

    I understand that in no way "jet washing" or redecoration can be classified as any improvement, and therefore majority of costs I would classify as allowable, even though they relate to the larger block itself and are in the category of "major works". In addition, I am also inclined to include the structural costs - these again are not improvements, but rather repairs, as otherwise in my mind the building would have been unsafe - therefore they are bringing it only to a usable state.

    Looking online I find contradicting information about these items, but logically (being an accountant, not a tax expert though) I would always classify these as allowable.

    If someone has any similar experiences then I would appreciate your views.

    Thanks

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