How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3609
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Hi I am currently trying to complete my tax return on rental

Resolved Question:

Hi I am currently trying to complete my tax return on rental income I have received through the let property campagin and I can't seem to find out if rewiring the property before I let it out is an allowable expense. The fuse box needed changing and the electrian advised the house would need rewiring to get it to standard. As it is not a legal requirement to update the electric but it is up to the landlord to ensure the property is at a good standard I can't tell if it's a deductable expnse or an improvment?Thanks R Rutherford
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello Mr Rurherford, I'm Keith and happy to help you with your question.
This is like the argument about how many saints can dance on the tip of a needle! Here is HMRC advice on the matter from Record Keeping and capital gains:
'Improvement costs
If you've spent money improving the value of your asset you may be able to deduct these costs. You can do so if the improvement is still reflected in the value of the asset when you dispose of it. For example, you install a swimming pool to add value to your property. It's still part of the property when you sell or dispose of it, so you can deduct the cost of the swimming pool. Maintenance costs, such as decorating, don't count.'
This, I submit, puts a re-wiring, clearly into the maintenance category.
However, in How to calculate capital gains and losses on property, HMRC advice is:
'improvement costs to increase the value of the property - but not normal maintenance costs such as repairs or decorating.'
However, in Renting out your property HMRC say:
'Allowable expenses don’t include ‘capital expenditure’ - like buying a property or renovating it beyond repairs to wear and tear.'
Now er all know that from time to time electrical systems do wear out and need replacement so I would submit that this further strengthens the case for the cost being tax deductible from rentals for Income Tax purposes as opposed to being an improvement adding to the acquisition price of the house for Capital Gains tax computations.
I do hope I have thrown some light into this rather murky area of property taxation.
Customer: replied 2 years ago.

Slightly clearer, but feel it is more a judgement call as oppose to a definate line on whether it is tax deductable. I would not have rewired the house and changed the fuse box if I was not going to rent it out so does this further strengthen the case for it being tax deductible or not? Many thanks

Expert:  bigduckontax replied 2 years ago.
Yes, but I did enter a caveat in my initial remarks in reply to your question. As I said this could be argued one way or another until the cows come home. You could run it across your tax office for advice if you feel so inclined. I would suggest that you merely charge it as maintenance against rental income and if you make a loss in that tax year the loss can be carried forward to the next tax year. Such losses cannot be offset against income from employment.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3609
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.co.uk/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.co.uk/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.co.uk/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.co.uk/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions