Are Pre-Trading Expenses Tax-Deductible for Rental Properties?

Q.2 Can Repair Costs Be Deducted As Allowable Expenses? I Need To Complete My Self-Assessment Return. I’m Confident Filling It In; However, I Have Some Disclaimer: This ‘Tax Insider’ Newsletter Is Produced For General Guidance Only, And Professional Advice Should Be Sought Before Any Decision Is Made. Individual Circumstances Can Vary And Therefore No Responsibility Can Be Accepted By The Contributors Or The Publisher, Tax Insider Ltd, For Any Action Taken, Or Any Decision Made To Refrain From Action, By Any Readers Of This Guide. All Rights Reserved. No Part Of This Guide May Be Reproduced Or Transmitted In Any Form Or By Any Means. To The Fullest Extent Permitted By Law, The Contributors And Tax Insider Ltd Do Not Accept Liability For Any Direct, Indirect, Special, Consequential Or Other Losses Or Damages Of Whatsoever Kind Arising From Using This Guide. Queries Regarding Property Expenses. Last Year, I Moved Out Of My Flat Around March And Got My Flat Ready To Rent For August. I Had To Replace The Boiler Because It Had Broken Down As It Was Very Old, And Replaced The Fuse Board And Some Sockets And Lights To Pass Safety Regulations. Are These Expenses Tax-Deductible As It’s Not Clear, And I Keep Reading Conflicting Articles?

Arthur Weller replies:

These expenses are tax-deductible. They are pre[1]trading expenses; see HMRC’s Property Income Manual at PIM2505. It is explained there that if (a) the expenditure was incurred within seven years before the rental business started, and (b) it is not otherwise allowable as a deduction for tax purposes, and (c) it would have been allowed as a deduction if it had been incurred after the rental business started, these expenses are allowable. It seems to me that what you have described falls into these criteria.