rental property and rennovation costs

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viztopia

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i have a restaurant which i currently rent. i have spent some money on rennovations to the property that i had to do beofre i could lease it. the expenditure was less than 10% of teh market value of the property and it was general rennovations and changed the structure in no way. Will i be able to claim these costs against my rental income and if so will it be as a normal expense or as capital allowances?
 
It depends on the nature of the renovations - if they are regarded as "plant" then you should be able to claim to capital allowances. This would include carpets and other assets that are not part of the premises.

However for paint jobs and non-asset items may not be claimable to the extent that they were pre-letting expenses. Tax law does not permit pre-rental items to be allowable as an expense. The question is whether the expenses were pre-rental or not? If you had the restaurant rented prior to the current letting then such expenditure may not be pre-rental.

Its a bit of a grey area but someone else may be able to add something more precise.
 
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