Allowable expeses for tax purposes on rental property

vulcan59

I have a property which will shortly be let for the first time. My first rental property. I have had do do maintenance and repairs to get it ready for letting. Painting, replace carpets, some electrical work and various other things. There are also expenses where I have had to pay the letting agent.

I think I understand how these costs can be offset against rental income for income tax purposes and I understand that improvements aren't allowed to be offset. After reading various web sites including HMRC I haven't been able to understand the situation about offsetting expenses incurred before the first letting. I get the impression that the situation is different for these expenses to expenses incurred during a tenancy.

Can someone point me in the right direction please. Will I be able to deduct my expenses for preparing the property from any income I get in this tax year?

Thanks.

anselld

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

Pre let expenses are allowable so long as they are genuinely routine maintenance rather than improvement. eg ..
Painting OK
Electical - replace worn socket like for like ok. add a new socket not ok.

Carpets and furnishings would not be allowed if you are intending to claim 10% wear and tear on furnished let.

Agents fees associated with letting would be allowed.

Annie1960

Keep any receipts for improvement/capital expenses, as you may need to offset these against CGT when the time comes for you to sell.

vulcan59

Thanks for the replies. The property will not be furnished apart from curtains and carpets so I will not be claiming the 10% wear and tear.

I have had some expenses which aren't exactly maintenance but were necessary in order to let the property. Examples are -
Cost of gas safety inspection
Cost of energy performance certificate
Cost of supplying and installing a free standing cooker.

Are those allowable expenses?

Thanks.

Kynthia

Were the expenses incurred 'wholly and exclusively' for the benefit of your letting business and of no other benefit to yourself? If so then the expense tends to be allowable, and if it's not an enhancement or relating to the purchase or sale of the property then it tends to be a revenue expenditure.

jjlandlord

vulcan59 wrote: »

Cost of gas safety inspection
Cost of energy performance certificate

Yes.

vulcan59 wrote: »

Cost of supplying and installing a free standing cooker.

No (at least, HMRC now says no).

vulcan59

Thanks jjlandlord. Can you point me to any HMRC documentation that applies to the cooker? You say HMRC would not allow a claim. Is this based on personal experience or written HMRC guidance?

Many thanks for your help.

jjlandlord

There are many references on this: It was a concession by HMRC, which was removed 2 years ago iirc.

Try googling, e.g. "free standing appliances rental business tax".