Can costs of EICR be claimed against CGT?

g_moore

Can anyone advise if the costs of the works in order to obtain the now mandatory EICR [Electrical Installation Condition Report] be offset against Capital Gains Tax for the Landlord?  I expect the works may be considered as 'improvements' - and therefore not claimable against CGT; but the Government has now made it mandatory to have the Reports, so I'm not sure?

Mahsroh

I suspect this would be an allowable expense to offset against your revenue rather than an "improvement" that would offset against CGT. 

Although technically an improvement, it's only keeping the property in line with current standards, so would likely fall under the same category as replacing single glazed windows with double glazing (also an allowable expense). 

AlexMac

I wouldn't even hesitate to claim rewiring costs within annual self assessment returns of expenses as  "typical maintenance and repair costs" which include "repairing electrical faults" (- to quote HMRC at https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-case-studies#expenses-incurred-wholly-and-exclusively-for-the-property-rental-business

After all, and without asking a tax expert, it's not as if making electrics safe is...  " improvement (such as replacing a laminate kitchen worktop with a granite worktop)" to quote the "Allowable expenses" page at https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

Put another way, I'd rather get revenue relief at my marginal rate of 20% now, rather than CGT at some distant future date when I sell (or peg out!).  And although I'm meticulous in declaring everything honestly, I've never had the hint of a challenge in the 25 years I've been declaring income on my little BTL, so it's unlikely anyone would care if I have got that wrong!