Allowable expenses against Rental Income?

Brighty

Hi guys

Can anyone advise what of the following expenses are allowable against rental income please?

Background, parents passed away 2 months apart leaving us their rental property and their residential property we have also now rented out. When my father died 2 months after mum, we had to get a specialist cleaning company in due to the nature of his passing. Some months after, I hired a van and used it to empty the house of sentimental items and some furniture we wanted to keep. I was then going to hire a skip and empty the house myself and sell some stuff, but our agents found tenants who wanted to move in immediately, so I then paid a house clearance company to completely empty the house of what was left at very short notice. I also paid for a pre tenancy clean. I then had to pay land registry fees to get both houses put in our name.

So, what of the following are allowable expenses against the rental income?

1. Specialist Clean – I assume no, but?

2. Van hire – again, I assume probably not?

3. House clearance company – not sure on his one?

4. Pre tenancy clean – I assume this one is ok

5. Land registry fees - ?

Cheers

Brighty

HappyMJ

I wouldn't have thought any of them. The land registry charges are capital in nature and reduce any capital gains tax in future when you sell.

You could approach an accountant to prepare accounts for your rental business and ask them if they would consider them allowable or not.

Or...have an extensive read of the HMRC website... start here http://www.hmrc.gov.uk/agents/toolkits/property-rental.pdf

Hatrick24

Sorry to be the bearer of bad news, but truthfully, none of them would be deductable against the rental income. All costs incurred in getting the property ready for the first rental are not deductable for income tax unfortunately. Once the tenant has moved in, then you can claim any future costs you incurr of repair / mortgage interest / agents fees etc.

You should however, keep a record of these costs, as when you come to sell the property, they would be allowable against capital gains tax.

ericonabike

Not necessarily:

"Repairs to reinstate a worn or dilapidated asset are usually deductible as revenue expenditure.
The fact that the taxpayer bought the asset not long before the repairs are made does not in itself make the repair a capital expense. But a change of ownership combined with one or more additional factors may mean the expenditure is capital."

And:

"Expenditure incurred prior to the commencement of a rental business is allowable if it is incurred wholly and exclusively for the purposes of the rental business and it is not capital expenditure. In addition, the conditions must be satisfied for the relief to be due on expenditure
incurred before the start of the rental business. "

All from http://www.hmrc.gov.uk/agents/toolkits/property-rental.pdf in the link above. It's not rocket science - read it carefully and make your own judgement.