Tax relief on repairs not improvements for landlords

cganesh

I am very confused with all the tax concessions for landlords. I know that these divide into 'income' from rental and CGT after selling eventually. I have also heard about Capital Expenditure' claims which I don't understand.
I have bought a buy-to-let property which I am renting out shortly unfurnished. Before doing this I have had to provide curtain tracks and curtains, as it had none, a cooker hood, and replaced some old light fittings with new ones. I have also spent money on re-painting and have travelled to and from the property many times to do this.
Just what can I claim? It seems 'repairs' are covered but not 'improvements'. Surely everything I am doing is essential before renting, especially curtains?
Have different results from online searching so need help!

FR_262

Who said you had to provide these items? I don't have to provide curtains, although I do put up poles, and I don't provide a cooker hood.


You have got a gas safety cert haven't you? You must have one of these and renew it every year.

Dazi

Speaking from a tenants point of view....forget the curtains! every property we have rented the curtains go in one of those vacuum bags until the week before we leave, they are then washed or dry cleaned and hung back up.

Not wanting to be rude but I am sure there is a store out there somewhere called landlords-r-us and the best seller is flowery curtains

cganesh

No-one has answered my question, so I'm still confused. Are you saying Curtain tracks count as 'repair' but curtains don't. Every property I have ever rented had curtains up, and I certainly couldn't have rented this one out without tracks. Surely a cooker hood or fan is necessary in a kitchen otherwise you will get mould, same goes for the bathroom. Painting and decorating? Light fittings? I am going for up market rather than students-lol.
Yes I have sorted the gas out and put in safety alarms and everything. That's another thing I've done....

cganesh

Re last thread, 'I have ever rented' referred to being a tenant myself.

Dazi

Sorry I couldn't answer your question but it seems others have asked this too
http://www.landlordzone.co.uk/forums/archive/index.php/t-18845.html

jennifernil

You need to read up on "pre-letting expenditure".

http://www.hmrc.gov.uk/manuals/pimmanual/pim2505.htm

00ec25

capital expenditure is the term used to cover the purchase of equipment which would normally be expected to have a useable life lasting more than 1 year

capital expenditure buys an item for the first time (be it new or secondhand when actually purchased) whereas repairs expenditure puts an item back to the condition it was when first used

improvement expenditure adds value to an existing capital item , in your context the original grey area for this was double glazing. In the olden days HMRC regarding douible glazing as an imprevement since it replaced single glazing with something which did more than just leep the rain out, ie it also reduced heat loss. Nowadays of course the "norm" is double glazing is an expectation, so even if doing it for the first time, HMRC will now regard it as a repair not an improvement. This sort of arguement will apply with your light fittings - it is not possible to be definitve: yes its revenue, becuase we don't know what was there before and so the extent of any inherent "improvement". However, in reality you may be unlucky and get an HMRC stickler for the rules or they may be pragmatic and allow it on the basis of de minimus - you have to take a view and, to an extent, a chance. In practical terms your arguement is you are placing an exisiting light fitting that is no longer functional (ie repairs), you are not adding to the light circuit to give extra lights that did not previously exist so you are not improveing the lights in the property

curtain rails - again you could take the same argument that you are replacing worn out equipment so claim as repairs although the stickler would say these are fixtures and fittings and part of the fabirc of the property so capital

curtains - again this is fixtures and fittings with life >1 year (yes even in a rental thui will last that long) but you could counter argue that it is a replacement of old ones that were beyond economic repair so claim as revenue

As said this is very borderline stuff for trivial sums, the remaining 2 are however cast iron certainties:

repainting - repairs costs so revenue clealry putting the property back to its decorated condition

travel to/fro - revenue, it is a cost you incurred in necessarily undertaking your business. This assumes that the sole purpose of the journey as to visit your business premises - if you also stopped at your freinds or did some sightseeing whilst in the area then you will need to split between business and private

cganesh

I get that thanks. It explains that I can claim things prior to letting the property but still doesn't explain WHAT I can claim (i.e difference between repair and improvement) and doesn't explain capital expenditure. If my 'improvements', necessary or not count as capital expenditure can I claim this against CGT or something. The more I read the more confused I get. Thanks anyway.

cganesh

sorry posted this before last answer.

cganesh

Thanks, they are trivial I guess but still add up to over a grand, so that was why I asked. So is capital expenditure not claimable at all at any time or does it add on to the house purchase price and count against CGT when selling?