Hi,
I have a really old bathroom in my let property, over 15 years old.
I want to take it out install a new bathroom for the new tenants, totally revamp and upgrade.
Is this tax deductible?
Thanks,
Replies (3)
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Yes
But the real question is whether it is deductible from the current year's rental income subject to income tax or from the gain subject to capital gains tax when you sell the property.
It is a grey area. If you are replacing old bathroom equipment with new versions - a revamp - it is deductible as a repair from the rental income subject to income tax. If you are installing additional facilities such as adding a separate shower - an upgrade - it might well be capital expenditure. Have a look at the HMRC guidance in PIM2020.
and if you are firmly
in the grey - your decision/opinion on what the nature of the expense is may depend on what if you are intending to sell the property, if you make a healthy profit from rental income is, and what your marginal tax rate is. Of course non of these points should point you away from making an objective decision based upon the facts, but they may make for interesting reading in respect of the tax relief you may attain.