kanrent Posted October 20, 2017 Report Share Posted October 20, 2017 Hi a tax question One of my properties has been empty for 6 months undergoing refurbishment new tenants will move in next month. during the 6 month vacant period I have been paying the council tax. Can anyone tell me if I can off set what I have paid as an expence when I do my yearly self assessment tax return. Grateful of any advice Link to comment Share on other sites More sharing options...
Richlist Posted October 20, 2017 Report Share Posted October 20, 2017 Generally the answer would be yes but 6 months for a refurb sounds a long time. What was involved with the refurbished ? Was the property let before the refurb ? Link to comment Share on other sites More sharing options...
Melboy Posted October 20, 2017 Report Share Posted October 20, 2017 As I understand this question.......... and I have been there with this question as well, the answer is no. If the property was let, rented out etc. prior to refurbing then you could argue your point with HMRC BUT if you bought the property and then fefurbed to rent out the answer is no. Been there and have been refused. Link to comment Share on other sites More sharing options...
kanrent Posted October 20, 2017 Author Report Share Posted October 20, 2017 3 hours ago, Melboy said: As I understand this question.......... and I have been there with this question as well, the answer is no. If the property was let, rented out etc. prior to refurbing then you could argue your point with HMRC BUT if you bought the property and then fefurbed to rent out the answer is no. Been there and have been refused.it was rented out for 15 years prior to refurbishment 9 hours ago, Richlist said: Generally the answer would be yes but 6 months for a refurb sounds a long time. What was involved with the refurbished ? Was the property let before the refurb ? The property was let before it became vacant had new kitchen fitted new ceilings completely redecorated and new floorboards Link to comment Share on other sites More sharing options...
Melboy Posted October 21, 2017 Report Share Posted October 21, 2017 Property let by you? or another landlord? Kitchen fitting can be a capital expense allowance when you come to sell. The rest you mention could be an allowance set against taxable rental income. Any doubts have a chat with HMRC advisor. Link to comment Share on other sites More sharing options...
Richlist Posted October 21, 2017 Report Share Posted October 21, 2017 The issue of splitting the costs between revenue (income tax) and capital (cgt) is very clear with HMRC. If any of the refurbishment is a capital expense then the whole project cost becomes capital and can only be offset against CGT on disposal. That's for you to decide as only you know exactly what work has been carried out. If you have an accountant he will sort it for you or if unsure call HMRC. Link to comment Share on other sites More sharing options...
kanrent Posted October 21, 2017 Author Report Share Posted October 21, 2017 10 hours ago, Melboy said: Property let by you? or another landlord? Kitchen fitting can be a capital expense allowance when you come to sell. The rest you mention could be an allowance set against taxable rental income. Any doubts have a chat with HMRC advisor. Let by me On 20/10/2017 at 8:54 PM, Melboy said: As I understand this question.......... and I have been there with this question as well, the answer is no. If the property was let, rented out etc. prior to refurbing then you could argue your point with HMRC BUT if you bought the property and then fefurbed to rent out the answer is no. Been there and have been refused.it was rented out for 15 years prior to refurbishment On 20/10/2017 at 3:24 PM, Richlist said: Generally the answer would be yes but 6 months for a refurb sounds a long time. What was involved with the refurbished ? Was the property let before the refurb ? The property was let before it became vacant had new kitchen fitted new ceilings completely redecorated and new floorboards Link to comment Share on other sites More sharing options...
Richlist Posted October 23, 2017 Report Share Posted October 23, 2017 Usually the deciding factor is wether there has been an element of improvement e.g. improved kitchen , better features or electrics, built in appliances etc. If there has been improvement (not just better decoration or like for like replacement) then the lot becomes capital expense. Link to comment Share on other sites More sharing options...
Richlist Posted November 2, 2017 Report Share Posted November 2, 2017 I'm not sure we have answered your question fully because my answers have been in regard to income tax and capital gains tax on the refurbishment work rather than council tax. Each council is free to set its own rules with regard to council tax so I would suggest you talk to your local council for their rules on discounts......you may have overpaid. Irrespective of the income and capital gains tax position your council tax costs are usually allowable as an income tax expenditure on your annual tax return provided the property was let immediately prior to the refurbishment and will be let following completion of the work. Link to comment Share on other sites More sharing options...
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