Are costs incurred in replacing unsafe cladding in a buy to let apartment treated as capital or revenue ?
My instinct tells me it's a repair and renewal, but as it would add substantially to the market value of a property could the revenue argue it capital ?
Thanks
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Why have you abused the anonymous option? Cladding/fire safety work
Capital or revenueAre costs incurred in replacing unsafe cladding in a buy to let apartment treated as capital or revenue ?
My instinct tells me it's a repair and renewal, but as it would add substantially to the market value of a property could the revenue argue it capital ?
Thanks
Yes. That's the point. Pseudonymous is not the same as anonymous. You know I am Tax Dragon. Wanderer is Wanderer. Etc. A name is a name even if it's not 'real'.
Depends- how recently was the property purchased, was defective cladding reflected within the price the purchaser paid?
In my view it is tenable to claim the expense as a revenue expense. Could HMRC argue that it's capital? Yes they could. When and if they do, you can concede on the basis that you don't agree, but it isn't worth the costs of taking it to tribunal, or you could take it to tribunal if it is worth it.
DJKL alludes to Law Shipping. The converse case is, of course, Odeon Associated Theatres, and this little b**stard sits on the fence between them.
I've had a house for a number of years. Due to deterioration I need to replace the ceilings throughout. It was built in the 1970s and the ceilings are all covered in Artex containing Asbestos. The price was not depressed in any way to reflect this. Now I have to bring in the Asbestos people to remove it, which costs a small fortune. Nonetheless, I regard that as a revenue expense.
I bought a house last year and I have just discovered that there is a Japanese Knotweed infestation in the garden. There was no adjustment to the purchase price for this. I didn't know about it. I'm going to have to pay another bunch of c***s a small fortune to remove it. My solicitors may or may not be successful in recovering some of that small fortune from my seller and/or professionals acting. I regard the costs of removal as a revenue expense.
Given I only in total recall bits from circa four tax cases I do need my opportunity to use them when I can. (Law/Odeon/Ayrshire/Ramsay).I need a meaningful tax case with a D, I could then spell Roald and then nearly double my tax knowledge adding a further L,A,D.H.