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  • Tax

    Are these really not allowable?

    We are BTLers but at the start of the 17/18 tax year we tarted up and sold one of our flats. Our accountant says the Council Tax,  Electric & Water bills, Ground Rent and  Mortgage Payments for this flat aren't allowable against our BTL profit because it wasn't available to rent in that tax year and also we can't set these costs against our Capital Gain.

    It doesn't add up to a huge amount of money but I like to understand these things. Is he correct?

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    If the property wasn't available at all for rent during the tax year why should any expenses be allowable against tax?  I'm no accountant, but as far as I understand it for these sorts of costs to be real expenses the property must be available for rent after the tarting up has been undertaken.

    I can tell you that these costs are NOT capital costs and therefore CANNOT be set against any CGT liability that you have.

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    Do you own it as an individual or company as this may be relevant? If you're starting out , as I understand it, you can claim costs for up to 7 years from when you started your business but perhaps an accountant on this site could clarify the details. We bought or first property which didn't rent in that tax year so we couldn't claim expenses that year as there was no income but could claim it off rental income the following year .

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    Your accountant is correct, if you re-let the property after tarting up you could have claimed.

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA


    Thanks very much everyone. I am happy to pay what I should but would hate to think there's been a mistake. I now pay my tax with a song in my heart!

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