9.4.1 What are the basic principles?

The key issue for landlords undertaking work on the property is whether the costs incurred can be deducted against rental profits. The following is a summary of the position:

If the work can be classed as a repair, the costs are allowable as income expenditure.

If the work constitutes a replacement of a major item, or a radical alteration to the property, the costs are capital. In general, such costs are not allowable against rental profits. A deduction may be available as enhancement expenditure when the property is sold or otherwise disposed of.

Need help? Get subscribed!

To subscribe to this content, simply call 0800 231 5199

We can create a package that’s catered to your individual needs.

Or book a demo to see this product in action.