replacement of domestic items and pre letting.

I have a query on pre letting expenses and Replacement of Domestic Items (RODI). Have a situation of a house is purchased as a buy to let. The house is redecorated and then let out. The redecoration costs would be allowed as pre letting expenses. But what about a replacement carpet (or other furnishings) that come under RODI? Condition A is that there is a rental business carried on and condition B is that an item has been provided for use in the dwelling house and a new item replaces that item. The old carpet has not been used in the business as rental has not yet started. However the pre letting expense conditions allow an expense as if the business has started, eg the redecoration costs. Please could you clarify if the carpet replacement on a new let in the above example is allowable as a pre letting expense?. Thanks.

Hi,

Usually the rental business does not begin until the first property is let.  Any expenses incurred before the first let must be solely for the rental business and must not be capital expenditure.  Any qualifying pre-letting expenses are treated as incurred on the day the rental business commences.  This is usually the day the property is first let.  So the carpets and furniture would be allowable as pre letting expenses.  For further information, see  : Property Income Manual  . Thank you ,