Repair or not?

Repair or not?

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Hi

 A client has just relet a property after a few years as substantial repair work needed to be completed after his previous tenants 'trashed' the property. 

 In addition to this he had pipes leaking and in essence the house was a mess.  

The house also required Damp Proofing and hence some walls were 'Dry lined' and a floor was actually raised and a dpc laid before reconcreting and retiling. 

The majority of the work I feel would be repairs as it was putting the house back into it's original condition. I think I am happy with that as 'damp and rot treatment' is specifically mentioned by HMRC.  

I have queries over some items though. 

Supply and fitting of laminate flooring and tiles  where carpets once were - W&T was previous claimed when house was last let (hasn't been let for 3 years as client hadn't money to do repairs until now) but the house is no longer fully furnished so can't be claimed.  Would I be correct in thinking  that if the laminate/tile is replaced it can be claimed as a renewal  but this initial cost can’t be claimed?  Work dates pre 5 April 13.

Thanks in advance

Replies (5)

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By Steve Kesby
07th Jan 2014 13:02

I'd agree with you to a large extent

I'm not sure that dry lining the walls and installing a damp-proof course constitutes damp and rot treatment. It's done to avoid recurrence and, as such, is an improvement.

The laminate floor is also an improvement, but I'd agree that statutory renewals basis may apply subsequently (although I'm aware that the opinions of others differ).

Everything else sounds like repairs.

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By anon2000
07th Jan 2014 17:09

thanks

Thanks Steve, I had thought that the damp proofing and dry lining would have been ok as it was restoring the house to it's previous state as such?                     Would you not agree?              It's an old property (circa 1900) and it has probably been affected 'under the surface' so to speak for a long time, it got much worse due to the house being unoccupied for a long period of time (no heating on).        Likewise I can see that all the work (about 8.5k in total) would have increased the capital value of the property. 

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By zebaa
07th Jan 2014 20:41

In 1900...

...a newly built house would have a DPC ( damp proof course). If this is Northern England it would be done with a line of slates built into the base of the wall. The failure of this DPC leads to rising damp. As built the house would not have damp walls. Hope this helps.

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By anon2000
07th Jan 2014 21:42

It's in Northern Ireland

Thanks Zebaa, The house is in Northern Ireland so although I'm sure the house was fine when it was first built, I'm not sure how long it has been deteriorating for.  It has been inherited though around MARCH 82 so it's not as if it was bought and has been immediately needed this work doing.

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By Steve Kesby
08th Jan 2014 11:15

Following on...

... from zebaa's point, it might be worth checking with the builder that did the work.

If, as zebaa suggests, there already was a damp-proof course that has failed and this has simply been replaced with the modern equivalent, but otherwise no element of improvement, then it is a repair.

Similarly with the dry-lining if it's only purpose was to reinstate the property to it's former state or if it's purpose was to return the property to use more quickly then it would be a repair.

If either constitutes an improvement though, it will be capital, but relief should be available for the expense in the CGT computation if/when the property is sold.

 

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