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Rental Expense deduction whilst residing in flat

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An individual carries on a rental business, with several properties let.

As per PIM2505, any allowable later expenditure incurred leading up to the letting of additional properties is part of the rental business and can be deducted. 

Individual decides they wish to let their current residence and move in with partner. At this point they go ahead and incur repair and refurbishment expenditure that under nornaml circumstances would be an allowable deduction, it is not capital expenditure. This expenditure is made in the individuals eyes as 'wholly and exclusively' for the purposes of the business. The individual however has resided in the property whilst this work has been carried out, as there is some geographic distance between them and partner that would have made overseeing/completeing the work unfeesable.

Individual moves out shortly thereafter and the property is let. Does the fact that the individual resided in the property whilst the refurb work was underway taint the ability to claim as a revenue deduction? 

Replies (3)

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By Wanderer
29th Apr 2020 19:57

I'd say the expenditure is to repair wear & tear whilst individual occupied it as their residence. Not allowable.

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By jconnos
29th Apr 2020 21:57

Thank you Wanderer, I would tend to agree.

It's an interesting position though in that if the individual had moved out the day before work commenced rather than say, the day after, whether this would change the analysis?

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By Accountant A
15th Jun 2020 20:24

96df 7

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