My client has acquired a buy-to-let property and will be carrying out some repairs before taking on tenants. Will the repair costs qualify for a tax deduction?
This is a fairly common question which is often fraught with difficulty. The answer very much depends upon the facts. The discussion which follows relates to genuine repair and maintenance costs and not to works which result in a significant improvement over the asset’s original condition. The cost of such works will invariably be treated as capital.
It is generally accepted that the cost of routine repairs and maintenance, for example redecorating, carried out after a property acquisition is a revenue cost. Similarly, work to repair or reinstate a worn or dilapidated asset is usually deductible as a revenue expense and HMRC accept that carrying out repairs shortly after acquisition does not necessarily point to a capital expense. However, they also point out that if buying a property in good condition is capital then the combined cost of buying a dilapidated property and putting it into good condition must also be capital. So, in their view, the cost of repairs carried out after buying a property which was not in a fit state to let until the repairs had been carried out is a capital cost and even more so if the price paid for the property clearly reflected its dilapidated state.
This can perhaps be contrasted with the situation where the property is capable of being used in its current state but the new owner wishes to carry out some repair and maintenance work to appeal to a particular class of tenant, in which case the expenditure is, arguably, revenue in nature and deductible.
The weekend saw the release of the long awaited video epic by cult director David (call me Cecil B.) Lloyd. There was a moment of drama at the premier when the studio boss wanted to know why the film was 12 months late and over budget. Cecil B was heard to mutter “Michael Cimino didn't have this trouble” before flouncing off to his swimming session.
Some critics considered the car chases, shoot outs and sex scenes to be gratuitous, but Cecil B strongly defended his artistic credibility and stressed the need for realism. After all, we are talking about an accountant's office. His only regret that (rather like 9 and a half weeks), some of his best work ended up on the cutting room floor. He considered some scenes just too raw for the target audience, particularly those where the word “tax” was used.
Master cinematographer Maria Szabo was singled out for particular praise. Not only did she shoot the whole film on a hand held iphone, she also edited it on the phone lost the phone, lost the file and then found them again.
Praise from the critics:
Camilla Winkleman in the LA Times
I've seen some truly beautiful films in my time. This wasn't one of them.
The special effects were stunning. It's hard to believe the whole thing was shot at sea.
Andrew Haughton in the Winnipeg Chronicle
Clive Haughton's portrayal of a diamond geezer in a suit from Sarth London was awesome. Guy Ritchie eat your heart out.
When will John Thompson get his hair cut?
If I've missed a joke, please do let me know.
Watch it and weep. http://chrisduckett.co.uk/
There seems to have been a plethora of articles on cyber risks recently, so why the need for another one, you might ask? The reason is simple; businesses and individuals continue to be the victim of cyber scams.
It is also true that no matter how small your business, information that you hold in respect of customers, employees, product design etc. is of huge interest to cyber criminals.
The Current Top 5 Threats
Ransomware – a form of malware that attempts to encrypt your data and then extort a ransom in exchange for an unlock code. Usually delivered via e-mail. The key steps to protect your business are:
Phishing e-mails often look convincing, with faultless wording and genuine logos. Things you can do to help protect your business include:
What to do if you have been breached