Private Landlords

[The3rd Earl Of Derby]

If one of his properties was kitted out with new units&worktops does he claim this back in full or part through his tax? and if so how long would it be for that to happen?

Thank you very kindly

[Phil L]

We can claim back the tax on money spent on such items, EG if he's spent £1000 on worktops etc and at the end of the year has earned (and is due to pay tax on) £20,000, he will claim back the £1000 that he has not had and so he will pay tax on £19,000 instead. He doesn't actually get anything back, he just doesn't pay tax on that part of his earnings because he's not had it, he's spent it on your worktops. If you have purchased the units and worktops then you are within your rights to take them with you if and when you leave, provided you can refit the ones that were there before :-p This will go on this years accounts and will go in to the tax man in April.

[Nigel]

It depends!!!

If it is an 'improvement' that it is not allowed as an expense ( ie claimed against income).- you are not allowed for example if the house already had a kitchen to put in a better one to claim as expense, since the house already had one.

It may be allowed as a capital allowance ( so can claim 40% in 1st year 25% in the next years), but it might not be!!

You need to talk to a tax advisor or rung the tax office.

Nigel

[meow2222]

and that you do so to the same standard as before, and without any damage to said kit... which can have a habit of not happening in practice.

NT

[Rednadnerb]

I would have thought the answer is no. You can claim for the cost of repairs and you can get a 10% rent allowance for wear and tear but the taxman will not let you get away with claiming for anything that increases the capital value of the property that you are renting out.

[Nigel]

'you can get a 10% rent allowance for wear and tear '

but only if you let it out as a furnished letting

Nigel

[Ed Sirett]

I am not a tax adviser....

If the property is rented out furnished and you choose to take up the 10% for "wear and tear" then no further allowance is possible. Over the long run the 10% is probably a fair estimate for the replacement of furniture, fixtures and fittings. A kitchen worktop I guess is a fixture. The 10% is the best option if the place is in reasonable order to begin with.

Of course maintenance is 100% allowable against the profits but that would be for keeping the place running - e.g. Making a repair to the boiler.

If the place is unfurnished or you decide never to claim the wear/tear 10% then the rules are a bit different.

If the kitchen is something you improve so as to make or enhance the letting prospects then you can't claim it against the letting profits. You could however claim the cost of the refurbishments against the rise in the capital values when you come to sell to avoid your CGT liability. If you refurbish the place after you have already let it out say as part of a package of improvements between tenants then you can set the refurbishment cost against the rental profits.

The is no way the inland revenue will ever pay you _directly_ for the tax saved on this work. In the most extreme case where you made a loss on the letting then you would simply carry that loss forward to set against next year's profit.

The above is true to the best of my knowledge which is very likely incomplete or even downright wrong. YHBW.

[meow2222]

The thing with improvements vs repair & maintenance is its often impossible for anyone to prove its one or the other.

NT

[Ed Sirett]

Yes, of course there's a spectrum. The amounts for most of us would be fairly trivial one way or the other and no one's making any beef. If more were at stake then it might come to a show down and legals, I suppose.

[Andy Hall]