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TonyTax
TonyTax, Tax Consultant
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I am a landlord. I had a leak from the flat upstairs. I got

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I am a landlord. I had a leak from the flat upstairs. I got insurance company to pay for damage. However I was not covered for contents. I lost £1600 because of this. I took the landlord and tenant for the property above mine to a small claims court to get the £1600 refunded. The judge concluded that because I could not prove that they had willfully allowed leak to occur I could not claim the amount lost. Leak had been caused by a leaking drum on the washing machine which was allowed to run when no one was in the flat in contravention to manufactures advice. Can I claim the loss in my Tax form. The incident occurred in 2012 but I only went to the small claims court in 2014.
Regards,
Mr A. Rasul
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Is or was the flat let on a fully furnished basis? What exactly was the £1,600 spent on and when?
Customer: replied 2 years ago.

The flat was on a fully furnished basis. The claim I made was as stated below:-

The details of the claim I am making are:

Claim for payment of money

On 21st October, 2012 the pursuant’s tenant experienced a massive water leak from the flat above. The leak was due to a hole in the drum of their washing machine. As the tenants in the upstairs flat were out at the time the machine kept on delivering water into the drum and hence into the pursuant’s flat. The pursuant’s tenant went upstairs and knocked on the door. No one answered so they called the police. As the police were about to force the door open the tenants arrived and used their key to go into the flat and turn off the water. It was negligent for the washing machine to be left on whilst there was no one in the flat. The water flooded my kitchen, bathroom, both bedrooms, lounge and hallway. The defendant, the tenant in the flat above, has refused to pay the purser money not recoverable from the insurance company.

The pursuant is therefore making a claim for £1600 against the defendant. A breakdown of these costs is as follows:-

Loss of 1.75 months rent (£480/month) – not paid by insurance company 840

Insurance Excess Paid by me 250

Estimated Cost of lost time from private taxi work / phone calls etc.. Over 12 weeks. 100

Double bed, single bed, sofa and chair-Estimate to replace with second hand furniture 300

Beige rug in hallway 40


Rug with square pattern in lounge 70


Total Claimed 1600

I have wrote to the defendant on 2nd June 2014, asking for this to be settled by mutual agreement and obtained post office confirmation that she has received and signed for the letter on 24/06/2014. I have also asked the management company for the flat to contact the tenant and they have done so. In each occasion the defendant has failed to reply and therefore I feel that I have no alternative but to pursue my claim through the small claims court.

Regards,

Mr Rasul.

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 2 years ago.

Hi again.

As the property was being let fully furnished, you have had the option of claiming a wear and tear allowance equal to 10% of rental income annually regardless of whether you replaced any furnishings or for the actual cost of replacing such furnishings, not both. If you were not claiming the wear and tear allowance, then you can claim for the cost of the replacement furnishings you provided you replaced them by 5 April 2013. From 6 April 2013, you can only claim the wear and tear allowance so if you incurred the replacement expenditure after 5 April 2013, you cannot claim for the cost of the actual replacements.

There are some notes on the changes here. These changes are a matter of dispute between HMRC and the accountancy/tax profession and there may be a relaxation of the new rules as they currently stand.

As the insurance payout was for repairs as opposed to replacement furnishings, I'd claim the £250 excess as repair expenditure.

I'm afraid that you cannot claim tax relief for the loss of earnings or the loss of rent. You didn't receive the rent so you won't pay tax on rent you didn't receive in any event. I'd claim for the cost of phone calls.

I hope this helps but let me know if you have any further questions.

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