New landlord advice - CGT & maintanence offset tax

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    New landlord advice - CGT & maintanence offset tax

    Hi everyone,
    I am looking to buy a new house and rent my existing. I have 2 questions.

    1. If I rent my existing house for 12 months and then sell it within the next 6 months I can reclaim the 2nd home stamp. My question is whether I will need to pay CGT as I have rented it??

    2. I will rent the house unfurnished but I need to do some maintenance repairs before renting,
    A. Paint the soffits and facia.
    B. Replace a threadbare carpet
    C. Replace a 3 way CH/HT valve
    D. Remove an over grown tree in the garden.
    My question is, are these all approved expenses? Can I subtract the costs from the tax I'm due to pay? Is it ok to action these before tenants move in so that I can still claim against tax??

    Any advice is appreciated! Thanks

    #2
    1 - You will not have rented it for long enough to attract any CGT - you have an 18 month allowance, so the CGT bill will be zero.
    2 - All of those are allowable expenses (you will find conflicting advice about carpets, as the rules have changed recently), they are treated for tax as though they are incurred on the dat your first tenant moves in.
    Note that you can't claim for your own time/labour (or tools), so if you are doing the work, it will be materials only.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Thanks for the advice. Yes I have read many conflicting stores regarding carpet too but I'm assuming if I can prove the carpet is not fit for purpose with photos and can provide receipts I don't see why it would be an issue. I would have professionals carrying out the maitanence work for me.

      Comment


        #4
        Until this April carpets were excluded because they were furnishings and claiming for furnishings wasn't allowed in unfurnished property.
        That has now changed (even though the law to make the change is not in effect, as far as I can see).
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          You should also bear in mind that things can go wrong with this plan. I'm sure everyone would like to get tax relief on refurbing their home prior to sale, but we now have a new Chancellor and tax rules could change. In addition you could easily get a tenant that trashes the place costing you £many to put right or refuses to leave at the end of their tenancy, or there could be a delay in the sale of your existing property that takes you over the 18 month limit for reclaiming the additional SDLT. Its probably worth running the numbers on different scenarios to make sure this is really worth it. For me, with all the risks and complexities of letting at the moment, it wouldn't be.

          Comment

          Latest Activity

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            Hi Andrew
            First of all I've got an initial appointment to speak to an accountant on Friday!

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            08-12-2021, 18:02 PM
          • Reply to Caught out by changes to Capital Gains Tax
            by jpkeates
            Even if probate wasn't mandatory, it would probably have been useful.
            08-12-2021, 13:44 PM
          • Caught out by changes to Capital Gains Tax
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            I appreciate 'ignorance' is no excuse, however there are some mitigating factors, i.e. due to illness etc.

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          • Reply to Caught out by changes to Capital Gains Tax
            by AndrewDod
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          • Reply to Caught out by changes to Capital Gains Tax
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            jpkeates
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          • Reply to Caught out by changes to Capital Gains Tax
            by jpkeates
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          • Reply to Caught out by changes to Capital Gains Tax
            by reluctantlandlord1976
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            08-12-2021, 08:45 AM
          • Reply to Caught out by changes to Capital Gains Tax
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          • Reply to Caught out by changes to Capital Gains Tax
            by reluctantlandlord1976
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            08-12-2021, 00:55 AM
          • 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
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