Building insurance and tax question

stilernin

I am moving into a property while I refurbish it. It will be my only property until I buy a second, and I will then rent out the first. Hopefully the first will be rented out withing 6 months from now.

Do I begin to operate this as a 'business' from day one? Will the building insurance be any different for example and do I begin to keep financial records from the outset? If so, will buying costs be included?

Or does BTL begin when I move to second house?

I have no property at the moment. Have relocated, am living with relatives and will pay for the first property cash. Will then remortgage to buy second one cash. Although may buy second cash and then remortgage to invest spare cash.

Any help with planning this appreciated.

Thanks

BobProperty

stilernin wrote:

.....Do I begin to operate this as a 'business' from day one?

You are operating a business from day one.

stilernin wrote:

.... and do I begin to keep financial records from the outset?......

Yes, because you will need them either for income tax or CGT purposes and to know if you are making any money, which may be important. :eek:

clutton_2

the Inland Revenue have a newly self employed advice line, and they also run free day-long courses on self employment, and you learn a lot in terms of what records you need to keep etc - very useful.

insurance - you need to have the property insured immediately. Make sure there is some form of liability insurance in place (either your builder's insurance policy, or yours) to cover any accidental injury to anyone in your house during the refurb.

many refurb costs - such as installation of a new heating system can only be claimed against tax when you sell. Costs incurred on property repairs after the tenant has moved in, are generally claimable against income rental in the financial year in which they were incurred

But - i would find a good accountant and talk to him/her prior to setting up - the property business is very complex in terms of taxation.