A couple of questions on tax return - allowable expenses on rental property

dantgk1

as a sub question to question 2, I am doing my first tax return. We moved out of our flat in March 2011 and didn't have a tennant until the beginning of May 2011, but we spent March and April getting the flat ready (giving it a lick of paint). The receipts for the paint are dated March 11, but I didn't have to do a return then. Can I include the expense in this tax return I do?

Thanks

jimmo

I don’t think I ever said that replacing single glazed windows with double glazing was a problem and if you take another look at the second link in post #4 you will find.

“Further guidance is given in an article in TB59 issued July 2002 entitled ‘Schedule A: computation of profits: repairs to property’. This is reproduced at the end of this page.”

Then, towards the bottom of the page.

“An example is double-glazing. In the past we took the view that replacing single-glazed windows with double-glazed windows was an improvement and therefore capital expenditure. But times have changed. Building standards have improved and the types of replacement windows available from retailers have changed. We now accept that replacing single-glazed windows by double-glazed equivalents counts as allowable expenditure on repairs.”

Tat was published nearly 10 years ago so its not exactly news today.

The point I was trying to make is that if you bought a dilapidated property, fixed it up and then started letting it HMRC are likely to take the view that fixing it up is an improvement.

As a different example if you had a property that you had been letting for a few years, the roof started leaking and a few slates had disappeared then, ignoring insurance issues, that would be repairs. However, if you bought a property with the same roof problems, that would be an improvement.

In the first example you would be making good wear and tear that has generated during your period of letting. In the second you would be improving the property you bought , a property with an unsound roof, into something better, a weatherproof property.

Coming back to your windows, the issue is not the conversion from single to double glazing. The issue is whether your letting business replacing something rotten with something sound is repairing wear and tear (during the period of letting) or an improvement to its original acquisition.

The same principle applies if you used to live in the property yourself. What did you hand over to your lettings business? Was it a sound property or something in a dilapidated state?

I have to agree with chrismac1 that if you claim the window repairs as pre-letting expenditure the chances of HMRC picking up on it are pretty small but that’s the only thing I agree with.

As thing stand on here, if you had claimed for your windows as pre-letting expenditure and your case landed on my desk then if the amounts involved were sufficient to justify it, I would have definitely taken you on in anticipation of potentially charging you additional tax, interest and penalties for making a false Return.

Chrismac1 and I are from opposite sides of the fence and you should therefore not be surprised at our different views.

As I read it chrismac1 is suggesting that if you claim, its dodgy but you’ll probably get away with it. I am suggesting that its dodgy but if you get caught its really going to hurt you in the pocket.

chrismac1

Absolutely not. I am suggesting the OP claims it because:

1. This is a grey area and he or she has some tax precedent cases in his or her favour. So there is nothing dodgy about this in any way shape or form.

2. Because HMRC are so lax and has such poor quality staff these days, the chances of the OP even being required to defend that position and trot out the cases are near zero.

So whilst no doubt there is a wailing, and a gnashing of teeth, from the HMRC community on this site, this is pretty much a no brainer.