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Work carried out to an existing or newly acquired property resulting in the property being improved or altered is deemed to be a capital expense, which is deductible in the capital gains calculation on sale.

Repairs such as painting and redecorating, mending broken windows, replacing tiles, etc. are an allowable deduction from the rental income.

If a business rents a commercial property and under the terms of the lease the tenant is required to incur the cost of repairs, then the expense is allowed against the profits of the tenant’s business in full as the cost is required to enable the business to continue.

Currently landlords of unfurnished lettings are permitted to claim under the ‘renewals’ basis whereby the cost of replacements or ‘renewals’ of items such as a cooker can be deducted from rental profit so long as the cost of the original item had not been claimed. A claim might be possible as ‘repairs’ if the item repaired is attached to the fabric of the building and providing the item is ‘like for like’. Therefore the replacement of items such as sinks, baths and radiators should be allowed.
 
Planning Point: As from 6 April 2016 a new ‘replacement furniture relief’ will be available whereby landlords of all properties (apart from furnished holiday lets) can claim a deduction for the capital cost of replacing furniture, furnishings, appliances and kitchenware provided for the tenants’ use. The claim will be allowed so long as the original cost has not previously been claimed.

Claims for relief as ‘repairs’ will remain on items attached to the fabric of the building.