Question about repairs/redecorating after end of tenancy

Hi, I've been renting my flat out to tenants and am now going to sell. After the tenants left, I had to arrange some redecorating and repairs, which we waited to complete until the tenants left, because it would have disrupted the tenants. (For example – repainting the kitchen floor, painting in the bedrooms, and painting and grouting in the bathroom/shower.) I have a couple of questions: 1. As I'll be selling the flat, is it possible to deduct the repair/redecorating costs against the rental income previously received? 2. If that's not possible, can I offset the cost of these works against my capital gains tax instead? If so, what kind of deductible category/expense would that fall under, since the work done involved repairs & redecorating? Thanks for your help.

Hi ,
 

1) No because any income and expenses have to be occurred wholly & exclusively for the rental business. 2) No here is a list of the costs that you can deduct for capital gains tax purposes: CG15250 - Expenditure: incidental costs of acquisition and disposal   . This is how you calculate the gain: Tax when you sell property There is no category those repair/expenses would fall under.  You get you money back by increasing the sale price of your flat.  For example your flat might be worth £190,000 but if you spend £5,000 redecorating and replacing items on a like for like basis you might be able to sell the flat for £195,000.  Recuperating your expenses and leaving a nicer flat for the new owners to enjoy. Thank you .

Thanks for your reply. I have a couple of further questions: 1. The building factors organised essential, communal, structural works to the foundation of the building, gutters, and shared back court. These were part funded by the council. Can the amount I paid for my share of these works be offset against my rental income or against my CGT when I sell the property? If so, which deductible category would these costs fall under? 2. For CGT, do the land registration fees when buying a property count as allowable deductible expenses?

Hi Jan-21,
Thank you for your question.  
1) If these repair works were carried out whilst you were renting the property you could claim the share you paid against your property income. If the work was carried out after you ceased letting the property then you will not be able to claim this as an expense.
 2) The land registration fees when buying the property can be claimed as an allowable deduction for CGT.
Thank you.
 

Hi, thanks for your reply - just to clarify your answers above: 1. If the communal building repair works I outlined above were completed after my tenants moved out, would the share I paid for those repairs be an allowable deduction against CGT? If so, what deductible category would they fall under? 2. Also, for CGT, would any of the following count as deductible expenses?: - initial fees paid for arranging a mortgage when buying the flat - legal and bank fees for the mortgage discharge when paying off my mortgage a few years ago Thanks for your help.

Hi,
Repairs and maintenance are expenses and set aginst income from property, not capital gains. Fees for arranging a mortgage and the mortgage interest are expenses set agains property income and not capital gains. Nether are appropriate for capital gains. You can see guidance on capital expenditure at here:
CG15150 - Expenditure: introduction
Thank you.

Hi thanks for your reply. I have final question: 1. If some parts of the communal building repair works I outlined above were completed and paid for when my tenants were still there, with the rest completed and paid for afterwards, while the house was on sale, would any of these be deductible against the rental income? (The final account for the works was settled after the tenants left.) Thanks for your help.

Hi,
Thank you for your question.
No relief is due for those expenses because the repairs being undertaken are not repairs to the let property itself.
Thank you.