Question:
We own a student flat in Aberystwyth. In tax year 08/09 it was only rented until June 08, at which point we decided to replace carpets, redecorate and update the heating units.
We were unable to find tenants for the flat after this work in August, so decided to put the flat up for sale whilst keeping it available to rent, knowing that a potential purchaser would be a buy-to-let buyer. After property values collapsed, we took it off the selling market and finally found tenants in June 09.
My question is:
Whilst it was unrented in tax year 08/09, can I claim for costs incurred such as insurance, service charges, electrical certificates, cost of advertising, replacing carpets and heating units (rented for only 2 months of the tax year)?
Arthur Weller Replies:
These expenses are allowable.
It seems from the way that you describe your situation that your rental business did not cease and you were actively looking for a new tenant. If you look on the Revenue website, in the Property Income Manual, pages PIM2220 and 2510, you will see that in these circumstances you are OK to claim for these expenses. To quote:
'Provided the property is genuinely available for commercial letting - and the landlord is actively seeking tenants - they can deduct the expenditure incurred on that property in the normal way. The test is whether the expenditure on the property is incurred for the purposes of the rental business or whether it is really incurred for personal reasons.'
