This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Getting relief for capital expenditure on the accruals basis

Shared from Tax Insider: Getting relief for capital expenditure on the accruals basis
June 2022

Sarah Bradford explains how landlords using the accruals basis can obtain relief for capital expenditure. 

Although the cash basis is the default basis of accounts preparation for most landlords with rental income of £150,000 a year or less, some landlords continue to prepare their accounts using the accruals basis. This may be because they do not qualify for the cash basis, as would be the case if their annual rental income is more than £150,000, or because they simply choose to prepare accounts using the accruals basis. 

The rules for obtaining relief for capital expenditure differ depending on the way in which the accounts are prepared. Where the accruals basis is used, capital expenditure cannot be deducted in calculating profits, as is the case for certain types of capital expenditure where the cash basis is used. This is subject to an exception for the cost of replacement of domestic items in furnished lets. Instead,

This is one of our 2221 Premium articles

To see this article in full and unlock access to our complete library of 2221 articles click 'subscribe & unlock' below:

Subscriptions include a 14 day free trial
+ money back satisfaction guarantee

Begin your tax saving journey today

Each month our tax experts reveal FREE tax strategies to help minimise your taxes.

To get Tax Insider tips and updates delivered to your inbox every month simply enter your name and email address below:

Thank you
Thank you for signing up to hear from us!