Any Answers Answered: Residential property

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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.

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

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    avatar
    05th Sep 2016 12:21

    thanks guys - we love your Tax TV whenever we watch it - strange how many words begin with "re"
    revenue
    repair
    replace
    redecorate
    renew
    renovation

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    avatar
    to nick farrow
    05th Sep 2016 12:37

    nick farrow wrote:

    thanks guys - we love your Tax TV whenever we watch it - strange how many words begin with "re"
    revenue
    repair
    replace
    redecorate
    renew
    renovation

    Heh - brings that old ditty to mind, you know the one?
    "Oh I stuck my finger in the woodpecker's hole
    and the woodpecker said 'God bless my soul,
    take it out, take it out, take it out
    Reeeeeeeee-move it.'
    I removed my finger from the woodpecker's hole
    and the woodpecker said 'God bless my soul,
    put it back, put it back, put it back.
    Reeeeeeeee-place it.'
    I replaced my finger in the ..."
    and so on and so on for hours

    well that's quite enough of that. Back to tax returns.

    With kind regards
    Clint Westwood

    Thanks (1)

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