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Home Improvement Costs Against Tax
foiegras
Posts: 10 Forumite
Hi. My girlfriend has been renting out a flat for several years. The tenants have left and we want to sell it. It needs a new kitchen, bathroom and decorated. Am I right in thinking that she can offset the cost against the rent? We don't want to let it out again, just fix it up and sell it. Something I have read suggests that you can only do this if the work is done between or during lets.
Many Thanks,
Mike
Many Thanks,
Mike
0
Comments
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I think you are right. Doing it up to sell is clearly not part of the costs of letting.0
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Bummer. Surely through the wear and tear occurred during the let?0
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"a significantly better item"
The bathroom has an avocado suite from the 80's . Anything would be a significantly better item. Not sure it counts though.0 -
"for which she claimed the wear and tear allowance"
I suspect she may not have claimed wear and tear allowance unfortuanatly0 -
There are 2 aspects to building works when owning a property that is let out.
The first is 'repairs and maintenance'. This includes decorating, tiling, new taps, replacing a broken toilet or sink, replacing a shower etc etc. These are offset on your Schedule D income Tax.
The second is 'capital works'. This includes refurbishing a kitchen, refurbishing a bathroom, new roof etc etc. These are not set against income tax, but can be set against Capital Gains Tax
This is my understanding o how it works, but happy to be corrected.Eat vegetables and fear no creditors, rather than eat duck and hide.0 -
"The second is 'capital works'. This includes refurbishing a kitchen, refurbishing a bathroom, new roof etc etc. These are not set against income tax, but can be set against Capital Gains Tax"
Ok cool. I believe I have just worked out via another thread that due to various tax relief there won't be much if any capital gains to be paid. But it's good to know if there is then the cost of the new kitchen and bathroom can be put against capital gains. I just completely gutted the kitchen today and will be doing the bathroom soon. Flat is being ripped back to a shell.0 -
Note that the wear and tear allowance is only available to fully furnished lets.0
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