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  • FIRST POST
    • eddiejones
    • By eddiejones 14th Jan 20, 6:25 PM
    • 88Posts
    • 7Thanks
    eddiejones
    Expenses from previous tax year for renting out rlst
    • #1
    • 14th Jan 20, 6:25 PM
    Expenses from previous tax year for renting out rlst 14th Jan 20 at 6:25 PM
    Hi folks,

    I bought a flat early in 2019 but ending up having to move elsewhere before living there.
    It needed a new water tank, shower system which I had completed in early April 2019 (April 3), and I started renting it out in May.

    Any idea if I can offset that expense against the rental income for the 2019-20 tax year?

    Thanks,

    Ed
Page 1
    • need an answer
    • By need an answer 14th Jan 20, 6:51 PM
    • 2,543 Posts
    • 3,191 Thanks
    need an answer
    • #2
    • 14th Jan 20, 6:51 PM
    • #2
    • 14th Jan 20, 6:51 PM
    So these were expenses you incurred before renting the property?
    in S T 1 F 1
    out S 2 T F 2

    2017-32 2018 -33 2019 -21
    • eddiejones
    • By eddiejones 14th Jan 20, 7:13 PM
    • 88 Posts
    • 7 Thanks
    eddiejones
    • #3
    • 14th Jan 20, 7:13 PM
    • #3
    • 14th Jan 20, 7:13 PM
    A rental had been agreed, and it discovered that the shower didn't work.

    I guess from your question that in principle yes, I can ��.
    • need an answer
    • By need an answer 14th Jan 20, 7:36 PM
    • 2,543 Posts
    • 3,191 Thanks
    need an answer
    • #4
    • 14th Jan 20, 7:36 PM
    • #4
    • 14th Jan 20, 7:36 PM
    Actually I would say potentially you cant claim it as an expense as you were not renting at the time,but if you wish to claim that rental was underway that's your call.
    in S T 1 F 1
    out S 2 T F 2

    2017-32 2018 -33 2019 -21
    • eddiejones
    • By eddiejones 14th Jan 20, 9:08 PM
    • 88 Posts
    • 7 Thanks
    eddiejones
    • #5
    • 14th Jan 20, 9:08 PM
    • #5
    • 14th Jan 20, 9:08 PM
    Ok, so in theory offsetting expenses over tax years is OK? That's all I was asking really.
    • eddiejones
    • By eddiejones 14th Jan 20, 10:22 PM
    • 88 Posts
    • 7 Thanks
    eddiejones
    • #6
    • 14th Jan 20, 10:22 PM
    • #6
    • 14th Jan 20, 10:22 PM
    I guess https://www.investorschronicle.co.uk/pf-matters/2017/11/30/the-buy-to-let-expenses-minefield/ explains it OK. Agree it's a bit murky.
    • 00ec25
    • By 00ec25 14th Jan 20, 10:25 PM
    • 8,962 Posts
    • 8,882 Thanks
    00ec25
    • #7
    • 14th Jan 20, 10:25 PM
    • #7
    • 14th Jan 20, 10:25 PM
    Ok, so in theory offsetting expenses over tax years is OK? That's all I was asking really.
    Originally posted by eddiejones
    then you need to do more reading since the property was intended to be your main home and is now your main home therefore such costs cannot be offset against rental income in full as only part of the cost relates to the business use period as the cost is not wholly and exclusively business related
    • eddiejones
    • By eddiejones 15th Jan 20, 9:43 AM
    • 88 Posts
    • 7 Thanks
    eddiejones
    • #8
    • 15th Jan 20, 9:43 AM
    • #8
    • 15th Jan 20, 9:43 AM
    Right. It's not my main home, and won't be again. It was bought initially with that idea... Well at least, early on in the buying process.
    • pramsay13
    • By pramsay13 15th Jan 20, 10:26 AM
    • 918 Posts
    • 1,273 Thanks
    pramsay13
    • #9
    • 15th Jan 20, 10:26 AM
    • #9
    • 15th Jan 20, 10:26 AM
    If there are expenses incurred in getting a property ready for rental they can be offset against income from that property, even over tax years.

    Be careful you are not including capital improvements.
    • 00ec25
    • By 00ec25 15th Jan 20, 1:43 PM
    • 8,962 Posts
    • 8,882 Thanks
    00ec25
    Right. It's not my main home, and won't be again. It was bought initially with that idea... Well at least, early on in the buying process.
    Originally posted by eddiejones
    OK I misread your opening line where it said "before living there" - so you meant you lived elsewhere instead of "there"

    pre taxing revenue repair expenses are allowed if incurred in the period 7 years prior to the start of the rental business

    if you are not going to use an accountant to make sure you get the capital and revenue costs split correct then you need to do a vast amount of reading if you intend to DIY your tax return

    Here is the manual
    https://www.gov.uk/hmrc-internal-manuals/property-income-manual

    here are the commencement rules
    https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2505

    spend a lot of time learning what is, and is not, a tax deductible "repair" and then learn what is a tax deductible non repair expense (crucially interest, if applic )
    https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2020
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