Richlist Posted February 14, 2014 Report Share Posted February 14, 2014 I have a rental flat that I'm about to put up for sale. I've done all the usual stuff like making sure its condition & decor etc are really nice and that it presents a bit of wow factor to potential purchasers. I'd now like to dress the entrance foyer & the landing of the flat with a few attractive potted plants to justify the ridiculously high price I'm gonna ask for this little gem. I certainly wouldn't need to spend more than say £150 on plants. Does anyone know what the tax situation would be ...... 1. Can I claim the cost of the plants as a legitimate advertising cost to set against CGT or 2. Can I claim the costs against income tax. The property is one of a large portfolio. Link to comment Share on other sites More sharing options...
chickpea Posted February 14, 2014 Report Share Posted February 14, 2014 Interesting question. Are you planning to leave the plants once you've sold - or remove them, ready for using for another sale? Link to comment Share on other sites More sharing options...
Richlist Posted February 15, 2014 Author Report Share Posted February 15, 2014 Well in this case I'm planning to remove the plants once we have exchanged contracts. They won't form part of the sale contract and are only to make the place seem more attractive. Link to comment Share on other sites More sharing options...
Melboy Posted February 15, 2014 Report Share Posted February 15, 2014 I very much doubt what your planning to do has any tax allowance you can claim for RL Link to comment Share on other sites More sharing options...
Richlist Posted February 15, 2014 Author Report Share Posted February 15, 2014 Well here are a couple of thoughts...... If you buy a property to let and it comes without, say, white goods in the kitchen, then we all know you cannot claim the initial cost of supplying those items to let with the property. However, if you sell the same property with those white goods then the initial cost of the items can be offset against CGT. So, I assume that if I included the plants in my sale contract I could include the cost of the plants as part of my CGT claim along with anything else I've bought that is included in the sale ? or As the plants are part of my property advertising costs......and advertising costs are an allowable expense, then presumably they are allowable ? . Link to comment Share on other sites More sharing options...
Dave A Posted February 15, 2014 Report Share Posted February 15, 2014 What about if you hired some. There are companies out there that hire substantial plants specifically for your purpose. Dave Link to comment Share on other sites More sharing options...
Richlist Posted February 15, 2014 Author Report Share Posted February 15, 2014 What about if you hired some. There are companies out there that hire substantial plants specifically for your purpose. Dave Yes I guess I could hire them but wether purchased or hired, in my opinion, the same principle applies to the tax treatment of those costs.......its either revenue or capital. So, which is it ? All posts welcomed. Link to comment Share on other sites More sharing options...
Melboy Posted February 15, 2014 Report Share Posted February 15, 2014 Having sold a few properties and being liable for CGT I think you will find that HMRC have a strict list on what they would consider as an allowable expense. Advertising.... yes EA's.... invoice yes. Installing a new kitchen.... yes.... Solicitor's ....Yes The list goes on but you know RL as I do if you were to run this allowance past the HMRC your request for pot plants the chances are they would fall off their chair laughing. Link to comment Share on other sites More sharing options...
Richlist Posted February 15, 2014 Author Report Share Posted February 15, 2014 That might well be the case ........although its my understanding that HMRC are not famous for their sense of humour. Note...there are other areas that one would assume might be viewed in the same light BUT which are accepted as perfectly 'legitimate' expense claims. There are also lots of grey areas where tax is involved. Normally taxpayers are not overly penalised for making what they see as a legitimate claim and that they can logically & robustly justify within the existing rules. I believe this expense is a legitimate claim and that the only question is wether its revenue or capital in nature. PS. New kitchens ( on a like for like basis) are a revenue expense.....they only become a capital expense if there is an element of improvement. Link to comment Share on other sites More sharing options...
Carryon Regardless Posted February 15, 2014 Report Share Posted February 15, 2014 Pre rental is the same as post rental in my view. There is no revenue to offset against in either case as the rental business of that property has either not started or has ceased. Link to comment Share on other sites More sharing options...
Richlist Posted February 15, 2014 Author Report Share Posted February 15, 2014 * Pre rental expenses can be claimed in certain circumstances. They are just claimed later once letting commences. * Multiple rental properties, for tax purposes, all combine into one pot and are treated as a single business. So the fact that there is no income for one property, whilst it is vacant and advertised for sale, makes no difference as tax is calculated on the overall portfolio * Post rental expenses for running the property whilst its empty & advertised for sale are legitimate revenue expenses. Link to comment Share on other sites More sharing options...
Carryon Regardless Posted February 16, 2014 Report Share Posted February 16, 2014 You've just written that your pot plants would be a revenue claim, if any. Link to comment Share on other sites More sharing options...
Richlist Posted February 16, 2014 Author Report Share Posted February 16, 2014 I was really refering to empty property running costs which are normally considered as revenue ie electricity, gas, service charges, ground rent, maintenance, mileage, insurance, mortgage interest etc etc. I've already said that in my opinion the costs of dressing a property could be either a revenue or capital expense.....I'd just like the views of a few of the regulars on this forum as to which. Link to comment Share on other sites More sharing options...
Chestnut Posted February 16, 2014 Report Share Posted February 16, 2014 Pot plants tax off-settable? Absolutely no idea! I guess revenue if necessarily replaced every time they die off! Or capital expense if they increase in value - like acorns to oak trees!! With claims like this, no wonder tax rates are so high!!!! Link to comment Share on other sites More sharing options...
Richlist Posted February 16, 2014 Author Report Share Posted February 16, 2014 Chestnut......thanks for your valuable input. Link to comment Share on other sites More sharing options...
Melboy Posted February 17, 2014 Report Share Posted February 17, 2014 Just do it RL Link to comment Share on other sites More sharing options...
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