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07 Aug 17
11:10
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Date Joined:
21 May 10
eg a property is rented out for £6000 during a tax year.
Sofa, bed and other furniture is purchased at start of tenancy for £2000.
Net taxable rental income = £4,000 (ignoring other expenses for simplicity).
The owner decides to move in to the property at start of year 2 and utilise the existing furniture. Does he lose any of the tax relief claimed in the previous year?
Sofa, bed and other furniture is purchased at start of tenancy for £2000.
Net taxable rental income = £4,000 (ignoring other expenses for simplicity).
The owner decides to move in to the property at start of year 2 and utilise the existing furniture. Does he lose any of the tax relief claimed in the previous year?
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I guess the correct way to do it would be to apportion the costs over the expected life of the furniture. Eg you could claim only £200 of expenses (furniture expected to last for 10 years) in any single year.
Do HMRC expect this level of detail from small landlords?
Do HMRC expect this level of detail from small landlords?
Posted before I saw your reply, MM.
I'll have to do some research into this. Seems like a bit of a loophole to me.
Maybe you can't charge the full cost of furniture to expenses in the first place. If you can, in a scenario like the one in my OP, you're effectively getting a discount on your furniture at your marginal tax rate.
I'll have to do some research into this. Seems like a bit of a loophole to me.
Maybe you can't charge the full cost of furniture to expenses in the first place. If you can, in a scenario like the one in my OP, you're effectively getting a discount on your furniture at your marginal tax rate.
They would not be allowed as they would be capital expenditure.
Can be included in cost of acquisition for CGT purposes.
Can be included in cost of acquisition for CGT purposes.
JH - like this:
Purchase price of property: £150k
Purchase price of furniture: £2k
Sale of property: £162k
Less purchase price of propert and furniture £152k
Taxable CGT amount = £10k (ignoring allowances etc)
So you could still claim the entire £2k even if you moved into the property after one year?
What if you moved out of your other home into the rented property and sold the former six months later. Which property would attract CGT?
Purchase price of property: £150k
Purchase price of furniture: £2k
Sale of property: £162k
Less purchase price of propert and furniture £152k
Taxable CGT amount = £10k (ignoring allowances etc)
So you could still claim the entire £2k even if you moved into the property after one year?
What if you moved out of your other home into the rented property and sold the former six months later. Which property would attract CGT?
The "wear and tear" allowance changed in April 2016 so prior to that date you could claim 10% of cost of furniture if the property was let fully furnished.
if you sell a property no one checks if it has been let.
LFC - CGT is payable on any gains made on the sale of a property other than your primary residence (I think)
Around half of the 27,000 landlords in Newham are not declaring their rental income. 
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https://www.theguardian.com/business/2017/aug/13/half-of-landlords-in-one-london-borough-fail-to-declare-rental-income
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https://www.theguardian.com/business/2017/aug/13/half-of-landlords-in-one-london-borough-fail-to-declare-rental-income
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