Work carried out to make sure house complies to law, claim tax back?

[ds2000]

Hi all,

I've had a bit of a search and the only thread I found similar to my query was diluted with two members arguing :(

Basically, in July this year I put my house up for rent - I'd landed a new job in Reading and it made sense to let someone else pay the mortgage for a bit. I wanted everything right legally and as a result unfortunately have incurred £3.5k of bills, new boiler, electrician and gas reports/charges, fire alarms etc (I have all receipts)

Can I reclaim anything of that 3.5k, I am happy to register a property maintenance business (despite the fact I'm making a loss and use these as business expenses if that's what I need to do).

Thanks in advance.

Dave

[Telometer]

No you may not.

Probably the only bit you can is the gas inspection - and it appears you've an electrician's inspection too which would also be OK.


(Oh yes, and you may register as many property maintenance businesses as you like but it won't do you any good.)

[TaxationPete]

You say let someone else pay the mortgage. You can only offset the interest element against the rental income. Do you have permission from your mortgage provider for the change of use to a rental property. Regards Peter

[ds2000]

Thanks for the replies :)

That's a shame regarding the big expense (being the boiler). The electric inspection with subsequent work was about £700, would it literally be just the £100 inspection that I could claim back on?

Peter - my bank are absolutely fine with the change, as I'm not buying to let, simply leasing my house out for a couple of/few years (no idea the difference tbh but their words) they did say there may be a one off £100 charge but that's not happened. In short, my mortgage is £640 a month, I am only getting £460 back once the estate agents management fee's have been taken out - obviously I was keen to see if I could claim back for any of the work done due to it being essential making the house suitable for letting.

[TaxationPete]

£640 a month. Only the interest is deductible not the £640 which sounds like a repayment mortgage. Regards Peter

[Telometer]

Is the electrical inspection allowable, given the result of the inspection is a load of disallowable costs. Maybe, maybe not.

[TaxationPete]

The cost of a P compliance safety certificate after the completion of the work is allowable. Pete D

[Telometer]

You say that Pete, but why?

[TaxationPete]

All LL and encouraged to have an electrical compliance certificate at least every 5 years. The cost is 'wholly and exclusively' and an expense to business. They are not compulsory as per the Gas cert but more and more letting agents are insisting on this now. Regards Peter

[Telometer]

Unfortunately the question is not whether it is "wholly and exclusively" incurred, but whether or not it is capital. I personally much prefer that the property was a capital acquisition, an inspection was undertaken and improvements arose from the inspection hence the inspection is capital.

A bit like a gas inspection. If you pay £100 for a gas inspection in your new rental property and your boiler is condemned, then the inspection is a part of the capital cost of installation of the new boiler. You then have a certificate issued automatically as a part of the installation procedure, so no deduction is, strictly, due.

Just for your info, it isn't a "part P compliance safety certificate" as there is no such thing. It is a PIR - periodic inspection report.

[TaxationPete]

On this very site :
http://www.landlordzone.co.uk/electrical_safety.htm
Regards Peter

[Telometer]

Lots of things on this site. Is there anything on that page to which you wish to refer me in order to justify your position that strictly a tax deduction is available for professional fees relating to improvements to the electrical system? Thought not.