I am in the process of setting up a company which will be used solely for purchasing and letting residential property. I have spent around £6,000 on the replacement of the kitchen, bathroom and the boiler in one of the properties.  I formally let this property as an individual, but have ceased this rental business prior to the improvements. Is it possible to relieve this expenditure against future company profits? I have been unable to find any advice on the HMRC website, except for pre-trading expenditure and my company is classed as an investment company, therefore not trading.   

Arthur Weller replies:  

The corporation tax legislation (at CTA 2009, s 61) allows a company to claim pre-trading expenditure. But that is only when the company actually exists. If the company does not exist when the expenditure is incurred, it is difficult to see how the company can claim this expenditure. Additionally, it is not clear from your question whether the company actually owns the property. However, pre-trading expenditure is generally allowed for a property investment business; see HMRC’s Property Income Manual at PIM2505.