I bought a house in 2012, and I lived in it until 2020. During that time, I had several pieces of work completed, including a loft conversion. This significantly impacted the value of the house. The house then became a buy-to-let property. Does the work completed outside of the letting period still count as CGT tax-deductible? Since letting out the property, repairs have been needed in the loft conversion and a new roof. Are these expenses deductible?
Arthur Weller replies:
Firstly, the work completed outside of the letting period still counts as CGT deductible when you eventually sell the property. Secondly, if you claimed the cost of the repairs needed in the loft conversion and a new roof against your rental income, then obviously you can't claim them as a deductible capital expense when you eventually sell the property. However, if you didn't claim the cost of the new roof against your rental income, HMRC’s Business Income Manual states that a new roof is classed as capital expenditure (see BIM35467), so you can claim it when you eventually sell the property.
