BTL TAX- A BIT LOST
Discussion
When decorating a BTL, I assume this is considered maintenance and not a capital cost, so in the specific situation a property has been let for a number of years and the wall finishes have degraded through normal use and been repaired with new materials.
As I understand it this should be depreciated over the lifetime of the purchase, say 3 years for painted walls, 5 years for carpets etc. Is that correct? Or am I mistaken!
What about window blinds? They were replaced due to age and general nackeredness, I stupidly tried to do it on the cheap with some blinds for Dunelm (they lasted less than 2 months lol.)
This is where I get really confused, this decoration lasted 12 months maybe a bit less, due to a sewerage escape problem. Do I claim for 100% of the costs for the initial redecoration in 2018, then figure out what was insured and what was not and claim for those costs in 2019?
As I understand it this should be depreciated over the lifetime of the purchase, say 3 years for painted walls, 5 years for carpets etc. Is that correct? Or am I mistaken!
What about window blinds? They were replaced due to age and general nackeredness, I stupidly tried to do it on the cheap with some blinds for Dunelm (they lasted less than 2 months lol.)
This is where I get really confused, this decoration lasted 12 months maybe a bit less, due to a sewerage escape problem. Do I claim for 100% of the costs for the initial redecoration in 2018, then figure out what was insured and what was not and claim for those costs in 2019?
Have you not got an accountant?
The rules for offsetting costs against rental properties are similar to, but not identical to, what can be claimed in a normal trading business.
For instance, there is no claim for depreciation in rental accounts.
Generally, day to day ongoing maintenance, decorating, repairs, gas safety checks etc etc are allowed as deductions against the rental income.
Costs incurred for replacement furniture, carpets, curtains etc are also allowable.
What is NOT allowable are major capital costs on the property, such as for extensions, room conversions, serious upgrades and improvements to bathrooms and kitchens etc. THESE types of costs are added to the original capital cost of the building and you will eventually get tax relief for this enhancement expenditure when you sell or dispose of the property and you are working out the Capital Gain for Capital Gains Tax purposes.
Regarding your query on the costs you expect to be covered by insurance, I would claim the full cost this year and, when and if the insurance comes in, offset the insurance income against repair costs in the year the insurance money is received.
Again, that is not what you would do in a set of business accounts but rental accounts are different.
The rules for offsetting costs against rental properties are similar to, but not identical to, what can be claimed in a normal trading business.
For instance, there is no claim for depreciation in rental accounts.
Generally, day to day ongoing maintenance, decorating, repairs, gas safety checks etc etc are allowed as deductions against the rental income.
Costs incurred for replacement furniture, carpets, curtains etc are also allowable.
What is NOT allowable are major capital costs on the property, such as for extensions, room conversions, serious upgrades and improvements to bathrooms and kitchens etc. THESE types of costs are added to the original capital cost of the building and you will eventually get tax relief for this enhancement expenditure when you sell or dispose of the property and you are working out the Capital Gain for Capital Gains Tax purposes.
Regarding your query on the costs you expect to be covered by insurance, I would claim the full cost this year and, when and if the insurance comes in, offset the insurance income against repair costs in the year the insurance money is received.
Again, that is not what you would do in a set of business accounts but rental accounts are different.
Eric Mc said:
Have you not got an accountant?
The rules for offsetting costs against rental properties are similar to, but not identical to, what can be claimed in a normal trading business.
For instance, there is no claim for depreciation in rental accounts.
Generally, day to day ongoing maintenance, decorating, repairs, gas safety checks etc etc are allowed as deductions against the rental income.
Costs incurred for replacement furniture, carpets, curtains etc are also allowable.
What is NOT allowable are major capital costs on the property, such as for extensions, room conversions, serious upgrades and improvements to bathrooms and kitchens etc. THESE types of costs are added to the original capital cost of the building and you will eventually get tax relief for this enhancement expenditure when you sell or dispose of the property and you are working out the Capital Gain for Capital Gains Tax purposes.
Regarding your query on the costs you expect to be covered by insurance, I would claim the full cost this year and, when and if the insurance comes in, offset the insurance income against repair costs in the year the insurance money is received.
Again, that is not what you would do in a set of business accounts but rental accounts are different.
Out of interest why is that NOT what you would do in a set of business accounts? The rules for offsetting costs against rental properties are similar to, but not identical to, what can be claimed in a normal trading business.
For instance, there is no claim for depreciation in rental accounts.
Generally, day to day ongoing maintenance, decorating, repairs, gas safety checks etc etc are allowed as deductions against the rental income.
Costs incurred for replacement furniture, carpets, curtains etc are also allowable.
What is NOT allowable are major capital costs on the property, such as for extensions, room conversions, serious upgrades and improvements to bathrooms and kitchens etc. THESE types of costs are added to the original capital cost of the building and you will eventually get tax relief for this enhancement expenditure when you sell or dispose of the property and you are working out the Capital Gain for Capital Gains Tax purposes.
Regarding your query on the costs you expect to be covered by insurance, I would claim the full cost this year and, when and if the insurance comes in, offset the insurance income against repair costs in the year the insurance money is received.
Again, that is not what you would do in a set of business accounts but rental accounts are different.
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