Improvement expenses allowable against rental income

Improvement expenses allowable against rental...

Didn't find your answer?

My client bought a house a couple of years ago. He has spent money 'doing it up' ready to rent out. This has amounted to approx £6k over the years. Are these expenses allowable against the rental income? He has also put in a new kitchen, if the expenses are not allowable can capital allowances be claimed against the kitchen? Thanks in advance for your help.

Replies (4)

Please login or register to join the discussion.

avatar
By King_Maker
30th Sep 2014 08:48

As asked, the answers are No and No (assuming the property is not a Furnished Holiday Let).

However, the kitchen expense may a revenue repair depending on exactly what work was done.

Have you searched the forum, as these questions have been covered many times?

Thanks (0)
Accountants Northampton
By Shamrock
30th Sep 2014 08:49

Depends
If the poor quality of the original fittings substantially lowered the buying price then the improvements would need to be capitalised.

However if they are a modernisation using materials of an equal quality and price range to the ones being replaced then this could fall within the r&m spend even for the kitchen.

Btw there are no capital allowances available on residential lettings and expenses can be backdated upto 7 years.

Thanks (1)
avatar
By Josh09
30th Sep 2014 08:52

Thank you for your answers. I haven't searched the forum but thanks for pointing that out!

Thanks (0)
avatar
By pedre
30th Sep 2014 09:53

Agree with Shamrock. If the property was not in a fit state to rent out and the expenditure is to bring it up to standard, this is capital expenditure. However, if it is merely restoring the property to its previous condition, that would be revenue expenditure.

Thanks (1)