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Tax and refurbishing residential properties

By Lee Sharpe, February 2021

Lee Sharpe looks at when tax relief is available for repairs to properties, and particularly when they are first acquired for letting out.

In this article, we shall look at a case study to illustrate the ‘capital versus revenue’ divide in the context of repairs to residential property. This is a common sticking point for landlords and their advisers. 

Generally, securing relief for income tax is preferred, as it results in an immediate deduction against in-year profits, rather than having to wait until a capital disposal occurs. References are to HMRC’s Property Income manual (PIM) or Business Income manual (BIM), but will largely hold good whether for income tax or corporation tax.

Key principles

  1. Significant repair expenditure on the acquisition of a new property does not mean that the expenditure must be capitalised: 
    a)   &nbsp

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