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Offsetting Tax against Rental Expenses

Hi All, We have just remortgaged the house, and are moving to another place.

We are going to rent this first house out for approx. 650 per month, the mortgage will be about 400 p/m Interest Only.

We are getting the house redecorated from top to bottom in neutral colours, and also getting a new, hardwearing kitchen fitted. If the monthy rental is

650 p/m over 12 months (7800), can we offset the cost of the kitchen and decorating against tax ?

Also, say for arguments sake, the kitchen cost 15,000 and the rental was the same as above, could you spread the tax offset over 2 years, 3 years etc... and\or until the rental income exceeded the expenses on the property for rent, if that makes sense ?

Many thanks all, hope you can help.

Rgds, Paul

Reply to
Paul
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Have you read the Inland Revenue's booklet IR150 - Taxation of rents: A guide to property income?

It's on their website.

Reply to
Doug Ramage

Hi Doug, Thanks for that. I've got it now.

I presume from reading it that the answer is yes to the kitchen deduction, but not the carry-over question ?

Paul

Reply to
Paul

If the kitchen item was a "repair", then it's deductible from income; if it's an improvement, it is more likely to be capital. The grey area is where it's a bit of both - in which case an apportionment might be acceptable.

Losses can be carried forward and set against the profits of the following years - if this was the thrust of your question.

Reply to
Doug Ramage

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