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Rental Income - When does redecoration cease to be a Revenue Expense?

Sorry for the naivity of the question but

1) I'm a first time landlord 2) My tax is not up to scratch 3) I couldn't find a definitive answer here or in IR150

I bought a house last tax year (04-05) and completely redecorated / renovated / improved the property. It shall be let in the tax year (05-06).

It may be worth noting that the property was actually let by the previous owner (I pity the poor tenants).

My question is "Which expenses are covered for the purpose of Revenue Expenditure, (especially redecoration)?"

Examples: Stripping wallpaper Replacing damaged skirting board Re-sanding / re-painting exisiting exposed floor boards. Replacing knackered carpets Buying new bed specifically for the purpose of renting the property

I'm OK on all the other stuff like, mortgage interest, council tax, water etc. I just can't find a definitive answer to distinguish what counts a revenue/capital expendire when it comes to redecoration.

Lastly, am I correct in presuming any losses need to registered in

04-05 so that they can be carried forward to offset gains in 05-06?

Thanks in advance.

Reply to
charlieopenshaw
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Normally all the above would be revenue. See IR150 sections 132-134.

This would be capital if it's an addition to the furniture inventory, but revenue if it's replacing an existing knackered bed with one of comparable original value.

But note the "normally" caveat above. All would be well if you had already started letting before carrying out repairs. If not, they may well all be capital because they're really part of the acquisition cost. See IR150 sections 154-155.

Sorry.

Reply to
Ronald Raygun

acquisition

Have re-read these sections with reference to what you say and I reckon you're spot on. They are essentially just part of the acquisition cost. Anyway that simplifies things - thanks

Reply to
charlieopenshaw

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