UK Landlord Forum / Life

I purchased a property for buy to let purposes a few months ago. It's not yet inhabited and is unlikely to be before the new tax year. This is my first and only BTL property.

I've spent about £15000 on mortgage, renovations and improvements since purchase which I know I can claim tax relief on but the question is...

Can I "roll" the spend on improvements and mortgage payments from the 15/16 tax year into the 16/17 tax year when the property will be finally let and earning some money or has it been lost because the property has not been let in the same tax year where the repairs and renovations were carried out?

Thank you to all.

It's not really my area of expertise but, as I understand it, "pre-commencement" expenditure is allowable - see: http://www.hmrc.gov.uk/manuals/pimmanual/pim2505.htm - and would be treated as having occurred in the same year that you first let the property out.

However, are you sure that the renovations and improvements you mention are really revenue expenditure? They sound a bit capital-y to me.

So far the £15k spend has been on:

Mortgage £3635
Insurance £600
Utility Bills + Council Tax £600
Decorating carpets and repairs £3000
Purchase costs £8000

I know purchase costs are capital but is the rest revenue?

You might find this a good place to start: https://www.gov.uk/government/publications/hmrc-property-rental-toolkit

You should be able to claim the interest element of your mortgage repayments, but not the capital. Your mortgage provider will give you a statement which breaks it down. You should be OK with Insurance, utilities and Council tax if you incurred them for the purpose of the business. Decorating and carpets are a bit of grey area so have read of the notes and see what you think. The tax man won't lock you up if you make an honest mistake.

The purchase costs are definitely capital, so you can't do a lot with them at the moment. They can be used to reduce your Capital Gains Tax liability if/when you sell the property at a later date though.

If the question is can I "roll losses" you mean can carry my loseses forward. The answer is yes.
http://www.hmrc.gov.uk/manuals/pimmanual/pim4210.htm

If the question is can I include "improvements" then the answer is usually no.
Just make sure you categories as much as you can as replacements and repairs and don't call anything improvement unless it actually really is.
Replacement of single pane window with double glazing? Can be a repair.
Replacement of washing machine with washer dryer? Is an improvement
Even in the latter case the correct treatment is split the cost into replacement and improvement and claim only the replacement.

Not all purchase costs are capital e.g. Fees for arranging for finance.
Only the interest of of your mortgage is deductible (for now)

Hope that helps.