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Where Taxpayers and Advisers Meet

Home improvement offset from previous financial year

masteroats
Posts:35
Joined:Wed Aug 06, 2008 3:48 pm
Home improvement offset from previous financial year

Postby masteroats » Mon Jan 06, 2020 5:54 pm

Hi,

During Q4 2018 I renovated my flat with the intention of selling (complete new bathroom, kitchen, flooring). However, I'm now considering keeping the property and renting it out.

If I do this in financial year 20/21, have I lost all ability to offset the cost of the work against rental income?

Thanks

someone
Posts:691
Joined:Mon Feb 13, 2017 10:09 am

Re: Home improvement offset from previous financial year

Postby someone » Tue Jan 07, 2020 8:51 am

You haven't lost all ability but you need to be careful to only include allowed expenses. Some may, or may not, be capital in nature.

In theory you can go back up to 7 years and the expenses are assumed to occur on the day the letting business starts.

But if I understand correctly, the expenses must be incurred wholly and exclusively for the purpose of letting. I'm unsure whether, on a strict interpretation, you can include your expenses as you appear to have incurred them with an intent to sell.

Pre-letting expenses are a complicated area, as is the decision as to what is capital in nature.


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