S20 works updated

S20 property works

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Last week I posted asking aboout S20 works.  The client had forwarded me a 'demand for payment' from surveyers in excess of yearly rental income.Since this time I have received documentation from the client detailing the work performed. Basically all the outside of the flat had fallen into disrepair and the surveyors via the freeholder had served all leaseholders with the same Notice demand to pay and it would have been awkward for one leaseholder to refuse to pay.  Looking at the detailed schedule it is to me all covered by PIM2030 - Deductions: repairs: is it capital?  To me it is all repairs and maintenance and satisfiies the replacement of the whole or simply repairs.  Obviously, my issue is that I have a property loss and repairs in excess of rental income.  Do colleagues ever offer their explanations in the part of the tax return that asks for 'Any other information for other property income'?  How wary should I be of admitting all the costs as these are incurred outside of he property which to me seem logical and fair on the grounds of exterier/damp treatment/stone/roof etc?

 

 

 

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Scooby
By gainsborough
20th Aug 2021 13:59

A note in the white space would suffice. I usually just give a brief breakdown of the larger costs and explain the revenue nature of the repairs. In a block of flats it is not unusual for major expenses to be incurred for the whole building once in a while.

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Replying to gainsborough:
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By davidbarry
23rd Aug 2021 10:02

Thank you for this reply. I am most grateful.
I agree with you that it is logical that from time to time this would occur and I assume a condition of the lease contract?
It was a demand notice from surveyors to pay as if the client had no choice in the matter. All lessees were equally billed and as far as I understand paid their own contribution to the repairs as otherwise the repairs contract would not work.
I was uneasy at a situation where rental costs are in excess of rental income and I know how closely HMRC review costs under repairs and maintenance.
Do you agree with me that I should review obligations of the lease contract with the freeholder? Thank you. I will take on board that i should disclose on the tax return the main items of expenditure.

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