AccountingWEB’s September edition of 'Any Answers Answered' features TAXtv hosts Giles Mooney and Tim Good discussing two property-related questions.
With the Summer holidays behind us the first question back relates to the upcoming tax return season.
AccountingWEB member Arbeiter has been working on a residential property question relating to re-wiring a rental flat. The client is currently living in the flat, is going to stop living there and rent it out in the future, but has had advice that it needs to be re-wired before they can let someone live there.
Tim Good explains there are a couple of issues going on here. The first being the capital versus revenue question, specifically whether the re-wiring of the property is capital expenditure or not.
The question is, according to Mooney referencing two landmark cases, are we talking about a ship or a cinema? Or, is the asset in a usable condition without the expenditure?
Find out more below about the Odeon cinema test, what it means in the context of this flat and on what basis you can get tax relief.
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The second question is also about property and comes from AccountingWEB member nick farrow. According to Mooney it could be affected by changes at the moment in the way we look at rented property.
His question is about getting a valuation that is being done on a property as part of the process of getting a mortgage for the home that is going to be rented out. Is the valuation tax deductible and if not, will it be in the future?
Find out the full answer from Tim Good in the video below:
For the latest episode of TAXtv visit PTP Interactive. TAXtv is a monthly tax update programme available as an annual subscription from £199, (11 issues plus special editions) to view online, download from the internet or watch on DVD.
About Robert Lovell
Business and finance journalist