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Posted Fri, 19 May 2023 14:02:24 GMT by leahyd
Hello Recently a family member has left me a property. I intend on letting it out. My query is due to energy efficiency regulations the would need a replacement boiler, top up loft insulation, replacement radiators etc etc to achieve those standards. As this is wholly for the purpose of letting out the property and meeting government regulation would that fall under the legitimate business expense heading, even though the property has never been let out previously?
Posted Tue, 23 May 2023 09:51:10 GMT by HMRC Admin 10
Thank you for your question.
As the expenses have been wholly and exclusively in order to bring the property up to standard of being able to rent out as part of the rental business, these costs would be deemed allowable as long as the repairs were revenue expenses and not capital expenses, as found in PIM2505, which concludes that if the costs had been incurred once the property had been let or the rental business already operating, this would have normally been accepted.
PIM2025 is found attached here:
PIM2505 - Beginning and end of a rental business: commencement - HMRC internal manual - GOV.UK ( 

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