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Rental Income - When does redecoration cease to be a Revenue Expense?

 
 
charlieopenshaw@gmail.com
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      04-20-2005, 12:36 PM
Sorry for the naivity of the question but
1) I'm a first time landlord
2) My tax is not up to scratch
3) I couldn't find a definitive answer here or in IR150

I bought a house last tax year (04-05) and completely redecorated /
renovated / improved the property. It shall be let in the tax year
(05-06).

It may be worth noting that the property was actually let by the
previous owner (I pity the poor tenants).

My question is "Which expenses are covered for the purpose of Revenue
Expenditure, (especially redecoration)?"

Examples:
Stripping wallpaper
Replacing damaged skirting board
Re-sanding / re-painting exisiting exposed floor boards.
Replacing knackered carpets
Buying new bed specifically for the purpose of renting the property

I'm OK on all the other stuff like, mortgage interest, council tax,
water etc. I just can't find a definitive answer to distinguish what
counts a revenue/capital expendire when it comes to redecoration.

Lastly, am I correct in presuming any losses need to registered in
04-05 so that they can be carried forward to offset gains in 05-06?

Thanks in advance.

 
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Ronald Raygun
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      04-20-2005, 03:08 PM
(E-Mail Removed) wrote:

> My question is "Which expenses are covered for the purpose of Revenue
> Expenditure, (especially redecoration)?"
>
> Examples:
> Stripping wallpaper
> Replacing damaged skirting board
> Re-sanding / re-painting exisiting exposed floor boards.
> Replacing knackered carpets


Normally all the above would be revenue. See IR150 sections 132-134.

> Buying new bed specifically for the purpose of renting the property


This would be capital if it's an addition to the furniture inventory,
but revenue if it's replacing an existing knackered bed with one of
comparable original value.

But note the "normally" caveat above. All would be well if you had
already started letting before carrying out repairs. If not, they
may well all be capital because they're really part of the acquisition
cost. See IR150 sections 154-155.

Sorry.

 
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charlieopenshaw@gmail.com
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      04-20-2005, 06:52 PM

Ronald Raygun wrote:
> (E-Mail Removed) wrote:
>
> > My question is "Which expenses are covered for the purpose of

Revenue
> > Expenditure, (especially redecoration)?"
> >
> > Examples:
> > Stripping wallpaper
> > Replacing damaged skirting board
> > Re-sanding / re-painting exisiting exposed floor boards.
> > Replacing knackered carpets

>
> Normally all the above would be revenue. See IR150 sections 132-134.
>
> > Buying new bed specifically for the purpose of renting the property

>
> This would be capital if it's an addition to the furniture inventory,
> but revenue if it's replacing an existing knackered bed with one of
> comparable original value.
>
> But note the "normally" caveat above. All would be well if you had
> already started letting before carrying out repairs. If not, they
> may well all be capital because they're really part of the

acquisition
> cost. See IR150 sections 154-155.


Have re-read these sections with reference to what you say and I reckon
you're spot on. They are essentially just part of the acquisition
cost.
Anyway that simplifies things - thanks

>
> Sorry.


 
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