Tax treatment of Renovation / Extension

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Bizzy

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We have carried out a mixture of renovations, improvements and extension to an investment property financed by way of a re-mortgage with a new lender. Cost of improvements c. 70k.

What is allowable under what type of expense? Are legal costs and valuation for moving mortgage allowable as expenses?

Do we record all improvements as expenses, which would create a loss in the relevant year and then carry forward the loss into subsequent years?

The extension was a conversion of a garage space into additional bedroom and living room.

Other improvements:
Converted two bedrooms to en-suite
New Kitchen units
Garden work-Created patio, tree cutting, new fencing,
Changed heating system to Gas/New Boiler, removed oil tank.

Electrical work
Plumbing work
New Bathroom suite

Does any of this have to be recorded as a Capital expense or Ware & Tare or does it all go down simply as a expenses?

Thanks in advance
Bizzy
 
Restoration, renovations and repairs are deductable against rental income in the year incurred.

Capital work in the form of extension is not allowable. See [broken link removed]and "what expenses cannot be claimed for?"
You can however offset the interest on the loan of 70K.

You need to decide what part relates to Restorations renovations and repairs and write this off in the year incurred. If a loss is made it can be carried forward and used against a loss in future years. See "What if a loss is made".
If the work is in relation to capital expenditure you cannot deduct the cost. When you sell the property the capital cost is aded to the cost of the property and then deducted from the sale price
 
Thanks asdfg.
I was afraid of that answer. Problem is I have all invoices receipts etc. no prob getting total. Deciding what catagory they fit into is a task my head has difficulty handling with only days to 31st Oct. We had paid our very kind buuilder c.80% in stages. Completed in early 2006. Only got invoice a couple of days ago. No Prob, fits into 2006 Return. But mistakingly thought all invoices/receipts were 2006. Turns out we had purchased alot of w&t items and had repair type work done in 2005. So, under pressure to decide what is what.

I file on-line but as there will be no 'Pay' for the 'Pay and File' does the extension apply if I 'File' on-line?
 
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