Pre letting expenses

[someone]

Can I double check I've understood correctly:

I own two flats, both of which have been my main home at one time or another and both have been used continuously as a home until recently.

End March my (now) wife and I put in an offer for another flat and decided we would let one of my flats rather than sell it.

Any expenses incurred prior to this time are not allowable as pre-letting expenses as they were not incurred wholy and exclusively for the letting business.

I replaced the kitchen in May (mostly like for like but washing machine became washer drier and dishwasher added) Most of this would have been allowable if the property had been let so it should also be allowable as a pre-letting expense. I was not using the flat at this time but it still had a bed and boxes of books and bookcases in it ready to move to the new flat. I assume this doesn't matter as the replacement kitchen has never been used by me other than testing things work.

My job was then notified as 'at risk' and I accepted a redundancy offer. The purchase was put on hold while I got another job offer. I also put on hold the refurbishment of the bathroom as a result. At no point did we abandon the purchase but the vendor remarketed for a few weeks while we were getting the mortgage offer reapproved.

The mortgage company accepted my new job offer and so we completed on the new flat in August moved everything out of the flat to be let, replaced the bathroom (like for like), fitted carpets and I am now talking to agents about letting.

In summary
Bathroom: Allowable pre-letting expense
Kitchen: Mostly allowable except improvements

Everything else (electrics, boiler etc) not allowable as not exclusively for the letting business as they were done while it was a home and without the intent to let the property.

Does that sound correct?

[bd6759]

Personally, I'd say it was all capital expenditure because the property was acquired by the business in a dilapidated state.

[someone]

Thanks.

Would you change your view if I told you it was let immediately prior to my purchasing it and had current gas and electrical certificates? I've only owned it for two years.

The boiler was old certainly but it did work. There was nothing wrong with the electrics but there was no RCD plus I wanted additional sockets fitted (there was nowhere to plug in bedside lights where I wanted the bed). I did these things within a couple of months of buying the flat. (and we've done exactly the same with the new flat) Both kitchen and bathroom were serviceable. I'd always intended to replace them but it wasn't urgent while I was living there and I debated not replacing the bathroom at all when getting it ready to let. (when the boiler was replaced I'd had it moved slightly and some tiles taken off the wall so that when I did the kitchen it could go in a cupboard - while I put up with it like that I'd effectively committed myself to replacing the kitchen before it could be let)