Are replacement carpets capital expenditure or repairs now?

[Tee]

Hi all

I note a change on the tax rules this year and don't seem to be able to get a straight answer re carpets - how are you treating replacement carpets in your self assessment calculations- as a capital expenditure or repairs now?

Thanks

Tee

[Richlist]

Is the specific tax change you refer to concerning HMRC cancelling the concession for claiming replacements in UNFURNISHED property ?

If so, the answer is neither carpets nor anything else can be offset against income tax or capital gains tax in furnished or unfurnished property. The only claim available now is the 10% wear & tear allowance on FULLY furnished property.

[Tee]

Thank you - It is in a fully furnished student property - the carpets had to be replaced due to the students - so if I am reading that right - the change means nothing can be off set re furnishings - replacements or repairs?

Thanks

[Richlist]

HMRC won't be interested in why the carpets had to be replaced and that fact will have no bearing on the tax position.

I haven't said you can't claim for repairs......you asked about replacements and my post addressed that question.

In fully furnished accommodation a landlord used to have two options:

1. Claim 10% wear & tear allowance. or

2. Claim the actual cost of the replacements.

Option 2 is no longer available.

If you are receiving payment in full or part for the replacement carpet from the students, perhaps from their deposit, you will need to account for that in your tax returns.

[Tee]

Thank you

[Richlist]

Just to further clarify:

* Replacements of built in appliances are still allowed as they are considered to be part of the building.

* Repairs (to almost anything in the property) including repairs to any free standing items are still an allowable expense. So e.g a repair to a non built in washing machine is an allowable expense. The cost of replacing the same machine is not an allowable expense.

Simple really isn't it ?