Pre trade expenses

0149witty Registered, FMAAT, AAT Licensed Accountant Posts: 16
I have a client that rents a property, he has recently purchased a second property also to let, with a buy to let mortgage. The second property was purchased in February and not let until May. I have been looking at hmrc’s property income manual and it reads as follows:

“Thus, after the first property has been let, any later expenditure leading up to the letting of the second and later properties is part of the rental business and can be deducted, provided it meets the conditions outlined at PIM1900 onwards (it is incurred wholly and exclusively for the purpose of the business, it isn’t capital expenditure etc.).”

From reading this I am assuming I can Put there mortgage interest, insurance, poll tax if paid themselves etc through the property as expenses for feb and March for the year ending Apr. Even though they have not rented until may.

I have never come across this before so I would be great full for any input and advice on this please.

I would also be great full of any advice on pre letting expenses, I know that they generally are capital, but if it was just some painting and decorating do hmrc really want this put as capital, it seems very trivial.


  • MarieNoelle
    MarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,433
    I would agree with your analysis that you have already a rental business so revenue expenses on the second BTL would be allowable. Similarly I would allow the painting and decorating if you are happy they're not capital in nature.
  • 0149witty
    0149witty Registered, FMAAT, AAT Licensed Accountant Posts: 16
    Thanks for your response, I hate grey areas and it good to get someone else views.
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