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bigduckontax, Accountant
Category: Tax
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If I buy a property that requires repairs/improvements and

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If I buy a property that requires repairs/improvements and I subsequently decided to rent it out once the works are complete, how much of the repairs cost can be claimed against the rental income?

If my partner has the rental property in her name but she lives in our family home, is she exposed to CGT if she later sells the house?

If we were ever to split up and she then moved back into her rental property, would she have to pay any CGT or would this not be an issue if she then lived in it for a period of time before she sold it?
Hello, I'm Keith and happy to help you with your question.

Bad news for you; the expenditure on improvements is added to the purchase price to inflate it thus reducing the gain for CGT in the event of some future, indeterminate sale. Repairs are only allowable against rental income. There is an alternative to this, the annual deduction of 10% of the rental, you must use one system or the other and cannot change once this election has been made.

Your partner is indeed exposed to CGT on sale on any gain made.

For the third point she might; it is generally reckoned that she must be back in occupation for at least a year before sale to escape this particular CGT trap. Otherwise CGT may be apportioned on a time basis and reduced.

In cases two and three Lettings Relief of up to 40K and the usual Annual Exempt Allowance of 10K will apply in the CGT computation.
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