New bathroom tax deductible question

Yoga Woga said:
Hmmmm. I'm definitely asking Revenue for a suggestion on how to proceed
Click to expand...

This is of course entirely contrary to the spirit of self assessment and a revenue official could get in trouble if they were seen to advise a taxpayer, see Apple.

It is of course also a very sensible idea, and as you say they are usually very helpful.
 
@Yoga Woga
As you can see there's no consensus on this area, but I think it'd be worthwhile for you to start a new thread, highlighting that this is a property you've just purchased and have never rented previously (if I've understood your posts correctly).
Surely that's an 'improvement' rather than repair / maintenance? Personally, I can't see how such capital expenditure could be offset against rental income.
 
Well, generally pre-letting expenses are not deductible so it might actually be advantageous to treat the works as capital expenditure (and not a repair) in those circumstances.
 
Sarenco said:
You asked how I think a Revenue official would likely view a claim on the basis of the facts presented by the OP. You are obviously free to disagree but I don’t think it’s fair to describe my response as absurd. As you said yourself, this is a grey area.

The OP didn’t tell us that he replaced like-with-like or that there was anything wrong with the existing bathroom. You added all these details yourself.
Click to expand...

Apologies, I read post #15 as a follow up to the OP, only after realising now that it’s a different poster.

I still think you are approaching things with an overly narrow view of what can constitute a repair or renewal.

I was actually going to suggest that you could turn this on its head, but I see you’ve already beaten me to it, in a way.

If you owned a second property (and for ease of analysis let’s say it’s neither a PPR nor a let property), and on disposal sought to claim enhancement expenditure for the type of spend under discussion here, Revenue would tell you no chance.
 
torblednam said:
If you owned a second property (and for ease of analysis let’s say it’s neither a PPR nor a let property), and on disposal sought to claim enhancement expenditure for the type of spend under discussion here, Revenue would tell you no chance.
Click to expand...
Don't think so.

As it happens, a relative of mine sold a holiday home a couple of years ago and claimed (on the advice of her accountant) a bathroom refurbishment as an enhancement for CGT purposes. Revenue didn't have any problem with this deduction.

Every case is obviously fact specific but in this case the refurbishment very clearly added value to the property at the time it was sold.
 
Sarenco said:
Don't think so.

As it happens, a relative of mine sold a holiday home a couple of years ago and claimed (on the advice of her accountant) a bathroom refurbishment as an enhancement for CGT purposes. Revenue didn't have any problem with this deduction.

Every case is obviously fact specific but in this case the refurbishment very clearly added value to the property at the time it was sold.
Click to expand...

When you say Revenue had no problem, do you mean they queried it and gave it a green light, or what?
 
Either way of claiming seems reasonable

Either against rental income

Or against capital gain on selling

Just not both obviously
 
No doubt there is a recommended approach

My own view would be to offset the decoration costs against the rental income.

If a landlord neglected to do this it might be acceptable to revenue to offset against capital gains.
 
Your own view notwithstanding, it is crystal clear that decoration expenses can be deducted in calculating rental profit.

It is also crystal clear that decoration expenses cannot be deducted in calculating a capital gain.
 
Can I interject to say here but ringing the Revenuie for an opinion is a waste of time. They aren't tax-qualified and you can't point to a telephone conversation you has when many years down the road you need to rely on it.

If you need advice outside of AAM, go to a tax advisor! 'You get what you pay for!'
 
Sarenco said:
I don't see how replacing a bathroom could be considered "maintenance".

Surely it's an "enhancement" (and hence deductible from CGT, not income tax).
Click to expand...
No it's not, it's a repair. That's how I treat it. And my accountant agrees. Same thing with the boiler. If you put in a brand new bathroom where none existed before that would be enhancement. Rental properties need constant repairs and maintenance including redoing bathrooms every so often.
 
torblednam said:
There’s always shades of grey here, but:

If the OP just replaced the sanitary ware, with other sanitary ware of similar spec, I’m sure you’d agree that’s not enhancement.

If they just replaced the tiling, ditto.

If they just repainted, ditto.

If they just replaced the shower, ditto.

All of them together....???
Click to expand...
I had this issue a couple of years ago. I had three showers where the tiling was very bad so I got a quote to replace them. As I live abroad I only got to see them afterwards, it was around 6K for the 3 I think. I was very sorry I didn't just pull out the whole shower room and start from scratch as now I've lovely shiny tiled showers with the rest of the room looking shabby in comparison. Sometimes the only way to do a job right it to take out everything and start from scratch as that makes the most sense and it's more economical in the long run. Doing it bit by bit in a small bathroom/toilet/showerroom doesn't always work.

I've another shower room to do and I'm going to pull out the lot. But I think I'll take pictures. So that it's clearly repair/replacement.
 
torblednam said:
There’s a certain amount of case law in relation to this issue. One example cited is the replacement of old single glazed windows, with double glazing. Now that is clearly an improvement, but advancement in standard materials means that such a replacement would be accepted as a repair.
Click to expand...

I actually studied this back in the day. That was the main example and the other one was the Garage forecourt. The canopy over it.

Revenue changed it's mind about windows. Because you clearly can't replace wooden damaged single glazed windows with the same item in this day and age. You have to put in PVC double glazing. A bog standard product which one time was very expensive and very much a mega improvement. But it was still replacement. And as you state it's an improvement for sure. But revenue are practical and now it's clear window replacement is allowed as a deduction in the tax year it's incurred. Because it's a necessary expense.

Also given all the legislaiton about standards we landlords are supposed to have special windows that open a certain way. So it's not like we can avoid the cost.

Cream Egg I disagree wtih you on the writing down of bathrooms over 8 years.
 
Yoga Woga said:
Hmmmm. I'm definitely asking Revenue for a suggestion on how to proceed - I
Click to expand...

Good luck with getting an answer from revenue. You'll get a different answer depending on who you speak to. But you most certainly will not be getting it in writing. What you need is an accountant .
 
I'll take a chance - I can either be right or wrong and it's not going to be significant money either way.
 
Yoga Woga said:
it's not going to be significant money either way.
Click to expand...
It could be significant enough in 6 years time if Revenue decide you were wrong and add penalties and interest.
Not trying to scare you, but you should get advice on this.
 
You must log in or register to reply here.
Back
Top