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29 March 2011
Clarification is requested on the allowability of repair expenditure shortly after a property is purchased. Is this allowable revenue expenditure or must it be treated as a capital expense?
Can readers clarify the allowability of property improvement costs for my two clients?
Mr A purchased a property with a view to letting it out. It could probably have been let in the condition it was in when purchased but it was in need of some repairs and rather than try to carry these out once the letting had commenced the work – costing approximately £10 000 – was done while the property was vacant.
My second client Mr B is a property developer who buys and sells properties. He purchased a property and spent about £10 000 repairing it (not capital improvements) with a view to then selling it on at a profit. Unfortunately due to the present state of the property market it did not sell and he decided to let the...
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