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Where Taxpayers and Advisers Meet

Deductible expenses after rental ended?

Jen22
Posts: 4
Joined: Sun Mar 22, 2015 6:07 pm

Deductible expenses after rental ended?

Postby Jen22 » Sun Mar 22, 2015 6:17 pm

Hi,

I've been letting out my flat since 2006, and have now decided to sell it.

The tenants moved out at the beginning of February and since then I have had to have quite a bit of work done on the property, although things like cleaning, redecorating etc (nothing capital).

I understand that I won't be able to deduct these expenses when calculating a capital gain once the property is sold, therefore my question is whether the property is still deemed to be a rental property up until the point it is sold and can I deduct these type of expenses from the rental income, even though the work was done after the tenant moved out?

Thanks in advance!

Ian McTernan CTA
Posts: 1232
Joined: Wed Aug 06, 2008 3:02 pm
Location: Bedford
Contact:

Re: Deductible expenses after rental ended?

Postby Ian McTernan CTA » Mon Mar 23, 2015 1:15 pm

Depends on the exact nature of the work.

Some of it would fall under the 'post cessation expenses' rules and can be claimed against the rental income, provided it was to make good damage caused by the tenants.

Redecorating in order to make the property more sellable could be counted as an expense to be set against the capital gain on the property.
McTernan Associates Ltd
Chartered Tax Advisers
Bedford
Email through link on website:
http://www.imcternan.com

Jen22
Posts: 4
Joined: Sun Mar 22, 2015 6:07 pm

Re: Deductible expenses after rental ended?

Postby Jen22 » Thu Mar 26, 2015 9:15 pm

Interesting - what I have read implied that I couldn't set it off against the capital gain at all.

I don't know how you would draw the line between the two - I will get a better sales price for the property having done the work, but then I would have needed to do the work in order to get it let out again because the previous tenants had been in for years and left it in a bit of a state.

section 44
Posts: 4468
Joined: Thu Oct 30, 2008 12:47 pm

Re: Deductible expenses after rental ended?

Postby section 44 » Fri Mar 27, 2015 10:49 am

what I have read implied that I couldn't set it off against the capital gain at all.
That's because it isn't deductible in computer the capital gain.

It is neither enhancement expenditure (because it is repairs and maintenance in nature - there is mutual exclusivity between calculating income profits and gains) nor is it an incidental cost of disposal (or anything else that would be deductible).


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