Rental Income and Expenditure and the HMRC Website
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Hi
I have read the hmrc website in relation to Rental Income,and some of the subheadings that are given for reference in relation to Schedule A. However when I read the section for general rules of expenses it says" expenses connected with the premises or land that is let out will normally be allowed as a deduction unless the expense relates to a capital matter". However they do not refer you to a subsection which gives you what they consider a 'Capital matter'.
(I apologise now if I've used the wrong forum.)
I was wondering as to whether the white goods that have been purchased for the rental property, would be an allowable expenditure, or would the inland rev view theses as a 'capital nature?/matter'
Also, unfortunately when we bought the property it had a "so called conservatory" - a wooden construction - more like lean to attached - used for additional storage. We had to demolish it, because on closer inspection,it was going rotten from beneath. ( Something which could not be foreseen even by the surveyor we had who inspected the whole property )
Anyway, when we demolished the lean to, they had built the exsisting decking around the construction, so we were left with a big hole!!!!
So we had to make good the garden area again, with new decking. As left as it was would have been a bit dangerous.
Would the new decking be classed as a repairs and maintenance of the property in light of the above? or again would this be Capital.
If anyone knows where else to look on the hmrc website for the definition of "Capital matter", please let me know as I've given up looking.
Sorry its a long one to read.
Regards
Bel
I have read the hmrc website in relation to Rental Income,and some of the subheadings that are given for reference in relation to Schedule A. However when I read the section for general rules of expenses it says" expenses connected with the premises or land that is let out will normally be allowed as a deduction unless the expense relates to a capital matter". However they do not refer you to a subsection which gives you what they consider a 'Capital matter'.
(I apologise now if I've used the wrong forum.)
I was wondering as to whether the white goods that have been purchased for the rental property, would be an allowable expenditure, or would the inland rev view theses as a 'capital nature?/matter'
Also, unfortunately when we bought the property it had a "so called conservatory" - a wooden construction - more like lean to attached - used for additional storage. We had to demolish it, because on closer inspection,it was going rotten from beneath. ( Something which could not be foreseen even by the surveyor we had who inspected the whole property )
Anyway, when we demolished the lean to, they had built the exsisting decking around the construction, so we were left with a big hole!!!!
So we had to make good the garden area again, with new decking. As left as it was would have been a bit dangerous.
Would the new decking be classed as a repairs and maintenance of the property in light of the above? or again would this be Capital.
If anyone knows where else to look on the hmrc website for the definition of "Capital matter", please let me know as I've given up looking.
Sorry its a long one to read.
Regards
Bel
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Comments
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Re:Rental Income and Expenditure and the HMRC Website
As far as I know, rental property expenses/repairs can be treated in two different ways. Repairs to the building itself are capital expenses, but repairs to the heating system, or windows can be general repairs and therefore expenses. You also have to decide how you are to claim for replacement items/repairs before you start. You can either claim 10% of the rental income as a general expense against repairs/replacements, or you can claim for the items/repairs etc themselves individually. There are alot of simple tax guides out there, which may be better than the HMRC website, but their guide to filling in the rental income pages is probably as good as anything!0 -
Re:Rental Income and Expenditure and the HMRC Website
This area is a minefield.
In answer to your specific question, I would suggest that the repair to the 'hole' is not a capital item ONLY if the property is already being let.
If you are bringing the property into a condition where you can start to let the property then all of that cost will be considered capital.
This is something property investors regularly fail to appreciate. If you are able to do so then I would always recommend letting a property as soon after purchase as possible, perhaps with a reduced rent, and do the repairs whilst the property is tenanted. That way tax relief is protected for the repairs.0