Post tenancy redecoration and repair costs

A tenancy ends and money is spent on repairs, redecoration and putting back to a clean and tidy pre tenancy condition, after this work is complete a decision is made to sell the property and not start another tenancy. Are these costs relating to this work claimable against income received as part of the ended tenancy within our self assessment?

Hi,

The expenses incurred in following the end of a tenancy are not an allowable deduction as you have ceased to be a landlord for business purposes. Any expenditure must be wholly and exclusively for the business. 

PIM2005 - Deductions: general rules: overview

Thank you.

Thanks, Just so I fully understand, if we rent it out again instead of selling, the costs that I referred to would then be tax duductable as I would contionue to be a landlord? cheers.

Hi alan23567,
As long as the property continues as a rental business then expenses would be deductable under Property Income Manual 2005.
As mentioned previously following the end of a tenancy expenses are not an allowable deduction as you have ceased to be a landlord for business purposes.
Any expenditure must be wholly and exclusively for the business.
Thank you.

This is a very useful Q&A with alan23567 - thank you both for posting here. One further question or clarification from HMRC, please, about owning two rental properties and deciding to sell one in the same sequence as alan23567 (i.e. deciding to sell after the redecoration work was complete). If the second property remains rented out, are expenses incurred in redecorating the first property prior to its sale tax deductible because the landlord remains in the "rental business" via the second property and hence the overall landlord "trade" has not ceased? Thank you in advance. PrivateSmallLandlord

Hi PrivateSmallLandlord,
I confirm that as the rental business is continuing, expenses incurred in redecorating the property which may be sold can be set against the gross profits as a deduction.
Please refer to:
PIM2505 - Beginning and end of a rental business: commencement
PIM2510 - Beginning and end of a rental business: cessation
Thank you. 

Thanks to PrivateSmallLandlord for the question as we are in the same position and didn’t think to ask regarding our other property which is still actively tenanted. I have an additional question and that is as part of the redecoration we had to replace some windows, will these be allowable expenses and will the gas/ electric and rates also be allowable up until the point of exchange? Thanks alan23567,

Hi ,
 

Thank you for your question.  For more information about expenses and whether they would be considered revenue or capital, please refer to our online Property Income Manual at PIM2030 :   PIM2030 - Deductions: repairs: is it capital?  . Thank you .

I have one property which I am selling and the tenants have now left and the property has been redecorated. Is this expenditure allowable against either Revenue or Capital gains tax as a cessation expense or under different provisions I also sought advice from a planning expert on whether my flooring complied with planning consents. Is this allowable either against revenue or as capital. Thank you

Hello, I am about to complete a significant redecoration between tenants, the property having been significantly damaged by the prior ones and the windows having not been replaced since 1970. Does the full expense need to be claimed within the tax year they occurred in or spread through the likely length of the next tenancy (following accounting amortisation rules)?

Hi Kenton Sparks,
You can see guidance here:
Tax when you sell property
Thank you.