CGT Capital expenses or maintenance ?

claire111

Hi

I bought a 2 year old house in 2019, lived in it for 2 years and it now has tenants in.

Whilst living there I had some work done, would it be worth keeping receipts for any of the following to use when I calculate CGT on the sale in a few years time or would they be considered maintenance ? I have looked at HMRC manual but its not great on examples !

Loft boarding
Building a linen cupboard
Upgrading from normal rads to towel rads
Fitting TV aerial
Landscaping of garden -Planting trees and shrubs as none existed
Fitting curtain rails where none existed
Fitting of cassette style black out blinds
Purchase of curtains
Fitting loo roll holders and other bathroom fixtures where none existed

Many thanks

Claire

[Deleted User]

claire111 said:

Hi

I bought a 2 year old house in 2019, lived in it for 2 years and it now has tenants in.

Whilst living there I had some work done, would it be worth keeping receipts for any of the following to use when I calculate CGT on the sale in a few years time or would they be considered maintenance ? I have looked at HMRC manual but its not great on examples !

Loft boarding
Building a linen cupboard
Upgrading from normal rads to towel rads
Fitting TV aerial
Landscaping of garden -Planting trees and shrubs as none existed
Fitting curtain rails where none existed
Fitting of cassette style black out blinds
Purchase of curtains
Fitting loo roll holders and other bathroom fixtures where none existed

Many thanks

Claire

I don’t regard any of those being anything other than repairs to be claimed against your rental income.

Jeremy535897

The expenses won't be deductible against rental income as they were incurred while the property was OP's main residence. I agree that these are in no way improvements to the property that would be reflected in its value on a sale. Unless any of them have some sort of ongoing guarantee, there is no need to keep the receipts.

[Deleted User]

Jeremy535897 said:

The expenses won't be deductible against rental income as they were incurred while the property was OP's main residence. I agree that these are in no way improvements to the property that would be reflected in its value on a sale. Unless any of them have some sort of ongoing guarantee, there is no need to keep the receipts.

Yes - missed the ‘while living there’ bit.

claire111

Thankyou both - replies much appreciated.

For future reference would all or any of the spending qualify as repairs had they been made during the rental period ? 

Many thanks

Claire

[Deleted User]

I would have classed them all as repairs.

You could claim the £1000 allowance which would be beneficial if your expenses were less than this amount?

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

Jeremy535897

It's a difficult question. The capital gains tax position is as follows:
One can deduct "the amount of any expenditure wholly and exclusively incurred on the asset by him or on his behalf for the purpose of enhancing the value of the asset, being expenditure reflected in the state or nature of the asset at the time of the disposal, and any expenditure wholly and exclusively incurred by him in establishing, preserving or defending his title to, or to a right over, the asset" (section 38 TCGA 1992).

So far as rental income is concerned, any expenditure of a revenue nature incurred while the property is let is normally deductible, unless specifically disallowed (like finance costs, where instead there is a basic rate tax credit). Some void period expenditure may be claimed. This is a wide definition when repairs are incurred. It is accepted, for example, that replacing old single glazed windows with double glazed ones may be treated as a repair.

It is possible for expenditure to fall through the cracks. An extension that was subsequently demolished before sale is one example.