Are repairs to a property carried out 3 or 4 years before the first rent is received be allowed for deduction against rental income? Are estate agents fees charged for an initial rental period of more than 1 year allowable against rents received?
Arthur Weller replies:
If you look at HMRC’s internal manual here, that per the rules written there, an expense incurred up to seven years before the first rent is received, is allowable. However this assumes that you were not living in the property yourself when the repairs were done. Also see there pim2120 where it says: ‘The expenses incurred in connection with the first letting or subletting of a property for more than one year are capital expenditure and therefore not allowable. The expenses include, for example, legal expenses (such as the cost of drawing up the lease), agent’s and surveyor’s fees and commission. Expenses for a let of a year or less can be deducted.’