Tax Relief on renovation for rental?

There are two issue here.

The first is, as mentioned above, to determine if the expenses are of a capital (ie an improvement) or a revenue (repair) nature. A rule of thumb is that replacing like for like is usually treated as a repair whereas improvements are treated as capital. If the expenses are capital then it does not matter whether it is paid for before or after you start to rent the property, you will always get tax relief on the expenses when you sell the property.

The costs of repairs (ie general decorating) would usually be set against your rental income each year, however if these expenses are incurred before you start to rent the property and whilst you are still living there then tax relief for them may be declined. For it to be allowable you have to be able to prove that the expenditure was incurred wholly and exclusively for the purposes of the rental business. This would be difficult as you are receiving a personal benefit whilst you are living in the property.