Tax deductable renovations on rental property?

Brighty

Hi all

We inherited a rental property with sitting tenants in 2012

In 2015, we had to relocate temporarily back to area where the rental was, so took possession of it and moved in.

Temporary relocation lasted a bit longer than expected, but is now over and we're moving back North to our old, currently empty, house next month. We will then rent out the inherited property again.

In the 2 years living in it, it's become clear that it is in a bit of a state and needs a fair bit of work doing to it to get it into a safe let-able standard. Needs complete rewire, then re-plaster to repair cracked ceilings and clean up after the rewire. Will then need a complete redecorate and new carpet all round. Boiler may also be beyond repair, shed is falling down and the garage needs a new door as the current wooden one is all but rotted away. A fair few grands worth of work there.

I'm fairly happy that all the above come under 'maintenance and repair' rather than 'improvements', so are deductible against income rather than capital, correct?

Now, i also understand that they can't be deducted until the property is first advertised to rent, i.e if we just bought/inherited it, we can't claim for anything done before it is advertised to rent? Whereas, any work carried out after that, can be deducted. Is that correct? Does that still apply if we have other rental properties, so already have a rental 'business'?

There's a few months work to do potentially, so assuming we'd be a bit premature advertising now, not knowing when the work will be complete. If the previous paragraph is correct, will we be able to deduct the work carried out before we market it, as we have rented the property before and also have other rental properties, or does moving into it ourselves 'reset the clock' as it were, meaning we can't claim anything until it's marketed?

Thanks

Brighty

00ec25

if the work takes place whilst you are still living there then it is not allowable

if it takes place after you move out then, because you already have other rental properties, it would be deductible as part of your portfolio and be declared on the first day you start letting it as it then falls within the 7 year rule for pre commencement expenditure incurred on a wholly and exclusively basis

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2505

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1020

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2000

Brighty

Excellent, thankyou