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Landlord/Solar Panels how to treat the investment

I installed Solar Panels on a property I let all year round. How is it best treated Taxwise

Hi

I invested in solar panelling and as a result of the free electricity I've upped the rent a bit but also given the tenants reason to optimise energy usage.

I'm aware of the income tax that will have to be  paid on the rent and Feed-in-Tariff payments I earn.

I'm unclear on the best way to treat the capital investment.  The property isn't registered as a business + I'm not VAT registered. 

I'd assumed I'd have to keep receipts and could up the purchase price of the property by the c£4000 for calculating Capital Gains Tax. But, it may be >>20years before I consider selling it if I do.

However, I understand there is something called Capital Allowances and that solar panelling is seen as a >25year asset. Maybe there are other options?

What is/are the best way(s) to proceed on the tax treatment of this?

I also invested in a Combi Boiler [replacing wall heaters] about 2 years ago and assumed that the capital investment(c£4000) is used to up the purchase price for CGT. If there are other options please advise.

Thankyou for any guidance 

Replies

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22nd Sep 2018 14:43

Is this a residential property ?

What do you mean by "not registered as a business" ? Do you mean "not a limited company"? Because that's not the same thing at all.

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By 5928
to lionofludesch
22nd Sep 2018 15:02

Hi lionofludesch

It is indeed a normal residential property which I did live in for 18 months or so many years ago - hence what is termed an accidental landlord :-) . [I'm aware of the proportion of ownership where it is my principal private residence being used to reduce the Capital Gain but that should be many years off]

Sorry if I used the wrong term. I did indeed mean the Limited Company. It is only my second property.

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to 5928
22nd Sep 2018 18:06

There are no capital allowances for residential property.

On the plus side, you were right not to register for VAT.

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22nd Sep 2018 18:41

5928 wrote:

If there are other options please advise.

Your best option is to pay for some professional advice to maximise the reliefs that you can claim and ensure that you comply with all your tax obligations. Good advice will pay for itself many times over.

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By 5928
to Accountant A
22nd Sep 2018 18:39

Hi
My fear is paying many £100s or more likely £100os given the complexity of my affairs to find that I have actually got nothing more to gain from it all than I already have.
I do numerous other things to reduce my tax bill but rest assured all are legitimate vehicles.
Completing a very detailed questionnaire i.e. essentially do 'all the administrative information gathering work' and an accountant review it to keep the accountancy bill down.

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By 5928
to Accountant A
22nd Sep 2018 18:39

Hi
My fear is paying many £100s or more likely £100os given the complexity of my affairs to find that I have actually got nothing more to gain from it all than I already have.
I do numerous other things to reduce my tax bill but rest assured all are legitimate vehicles.
Completing a very detailed questionnaire i.e. essentially do 'all the administrative information gathering work' and an accountant review it to keep the accountancy bill down.

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to 5928
22nd Sep 2018 18:42

5928 wrote:

Hi
My fear is paying many £100s or more likely £100os given the complexity of my affairs to find that I have actually got nothing more to gain from it all than I already have.
I do numerous other things to reduce my tax bill but rest assured all are legitimate vehicles.
Completing a very detailed questionnaire i.e. essentially do 'all the administrative information gathering work' and an accountant review it to keep the accountancy bill down.

I don't understand. Do you have a tax adviser or not?

Who has been preparing and submitting your tax returns (including your rental accounts)?

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By 5928
to Accountant A
22nd Sep 2018 18:56

I have no tax adviser and complete my own tax return and keep detailed records accordingly for each tax year. I've let the property for many years but this is the first time I've made capital improvements so just sought to check I wasn't missing a trick.
I read a great deal and pick up many ideas.

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By 5928
to Accountant A
22nd Sep 2018 18:56

I have no tax adviser and complete my own tax return and keep detailed records accordingly for each tax year. I've let the property for many years but this is the first time I've made capital improvements so just sought to check I wasn't missing a trick.
I read a great deal and pick up many ideas.

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to 5928
22nd Sep 2018 19:07

5928 wrote:

I have no tax adviser and complete my own tax return

Good luck then. If you can't see the value in consulting a professional, I can't tell you otherwise.

This is a site for accountants, by the way.

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By 5928
to Accountant A
22nd Sep 2018 19:17

OK - I did provide engineer in the profile.

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to 5928
22nd Sep 2018 20:55

5928 wrote:

OK - I did provide engineer in the profile.

https://www.accountingweb.co.uk/about-accountingweb

"AccountingWEB.co.uk is the largest independent online community for accounting and finance professionals in the UK ..."

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