Member Since: 9th Mar 2010
1st Oct 2021
Thanks Tax Dragon for a helpful response.
An interesting comparison in point is a landlord who bought a carpet cleaner to clean the rented property carpets specifically on change of tenant. It saves him money in the long term by avoiding the cost of frequent replacement carpets.
The carpet cleaner is a sensitive piece of kit, so he keeps it safely in his own home (wise chap).
But it is primarily used when the tenant vacates, so it is only used by the landlord himself in the dwelling houses of his tenants. A quick reading of s35 (2) suggests it is not allowable because it was bought for the sole use in a dwelling house.
An alternative view is that it is an allowable capital allowance cost of management because it will never be used by any tenants. But s35 (2) is driving me nuts because it seems to disallow the expenditure.
Any further considered views would be appreciated.
1st Oct 2021
Landlords can certainly claim for capital allowances. The SA property tax return pages can include both residential and commercial property rents and expenses. So capital allowance claims for commercial property rents are more clear cut.
However, capital allowance claims for residential properties are slightly more problematic due to CAA 2001 s35 (2) mentioned above.
The third area is capital allowances for the property portfolio management itself. A van trailer used for landed estate management purposes would attract capital allowances. But I assume (and no-one has confirmed it yet) that s35 (2) must have been drafted in such a way that the landlord can claim capital allowances for a computer he uses at home (his own "dwelling house") for landlord management purposes, but not any p&m he installs in one of his rented residential properties (i.e. a tenant's "dwelling house").
1st Oct 2021
Thanks. It is important not confuse the rules for:
i) EIS income tax relief,
ii) EIS CGT relief, and
iii) EIS CGT deferral relief.
In relation to iii) above (CGT deferral relief), in respect of shares issued after 5 April 1998, major changes were made to the relief. Importantly, it is no longer required for the shares to qualify for income tax relief and neither that the investor be UNCONNECTED the company. The changes were also extended to trustees.
27th Sep 2021
I do hope I am "barking up the wrong tree", as you say.
CAA 2001 s35 (2) says "The person’s expenditure is not qualifying expenditure if it is incurred in providing plant or machinery for use in a dwelling-house."
If I extract the phrase "in providing plant and machinery" from the above, it would appear to my lowly brain that ANY expenditure on plant and machinery for use in a dwelling house does not qualify for capital allowances.
However, I wonder if the phrase "in providing" has a special meaning that changes the sense so as to mean a "supply" of plant and machinery to the tenant. Because the landlord does not/cannot "supply" any office equipment to himself then maybe that is why p&m expenditure for managing the business is then allowable.
27th Sep 2021
I am hoping that I am wrong here too.
I did an hour's google search on the subject, checking various landlord tax advice sites as well as Tolleys. It seems that the various landlord tax advice sites seem to sidestep tackling the issue of capital allowances for computer expenditure within private landlord costs of managing the business
I was hoping that the CAA legislation was targeted at expenses within the actual "dwelling house", but I cannot see anything which suggests the disallowance is limited to expenditure on the rental property.
I was hoping someone could disagree with me but suggest where in the legislation the capital allowance is permitted for the computer costs. Or is it buried somewhere in the wording of CAA s35?
23rd Sep 2021
I have in the past used them on a number of occasions (Maybe 15 or so times)
Surprised that HMRC accepted my CG34 "reasonable" estimates on a number of occasions.
In one case I think HMRC put forward a more advantageous valuation to the client, which caught me by surprise.
Even chartered surveyors get it wrong sometimes.
And remember, valuation is not a precise science!
15th Sep 2021
More to the point, have you heard there's going to be no more Covid?
12th Jul 2021
Ahem! No tax rate is "generous", methinks.
An unsolicited tax refund maybe though.
22nd Jun 2021
I absolutely refuse to use any pseudonym whatsoever!
21st Jun 2021
And you lose up to 99p in the tax computation!
Client paid £2,500.98 in CGT through the "Report and pay CGT on Property Income" arrangement. I have input this figure onto the tax return software.
On the tax calculation it rounds the CGT payment down to £2,500.
So if the CGT overpaid ends up being refunded through the SA system, looks like you could lose up to 99p in CGT.
The patch up would be to manually give credit for £2,501 when inputting the CGT paid into the software.
Naughty, but nice!