# Need advice on expenses for rental



## drunat (4 Oct 2014)

Hi. I am getting confused in what is allowed as capital expense vs what should be put as wear and tear i.e. 12.5% over 8 years period.

I am doing accounts for 2013 now. For example I bought a fridge and freezer for the rental apartment in 2013 for say €1,000. Will I put in the whole amount of €1,000 as expense against my income or should I be only putting in 12.5% i.e €125 which means I will recoup the whole cost of the investment over 8 years only. I assume it can't be the case that I claim full amount now and then also do 12.5 % depreciation every year after? That would be double counting it, right?

I also want to know how to deal with the following expenses:

New kitchen put in (materials only c.4k)
Paints
Shelves
Attic insulated
Attic ladder
New washing machine, oven, hob
New carpets, underlay
New laminate flooring
Bathroom vent
bathroom tiling
New toilet, sinks etc
fire alarms, blanket
Mirror, plates, cups, mops
compost for garden improvement
curtains
Garden shed
key cut

Basically I am not really sure what is counted as expense i.e. 100% offsets against income and what should be depreciated at 12.5% a year. What about capital expenditure such as repairs, new floors, kitchen etc? Thanks for any help in advance much appreciated. Just totally confused in terminology


----------



## Branz (4 Oct 2014)

Search this site
http://www.revenue.ie/en/index.html
in top right for Rental
IT70 will get you started


----------



## Joe_90 (4 Oct 2014)

It's about repairs v capital.

Are you repairing the attic ladder or adding a new one?

New kitchen appliances are capital.

Paint , cups ect repairs as a rule.

Most of the rest is capital 12.5% pa

I'm not a fan of claiming capital allowances on fitted kitchens.


----------



## Bronte (6 Oct 2014)

Joe_90 said:


> I'm not a fan of claiming capital allowances on fitted kitchens.


 
Why?

He also mentioned a garden shed, I think this is an improvement and would not be claimable now, but would be under CGT if he sells the property?

Apart from wear and tear stuff, he needs to be careful on pre letting expenses not being allowed.


----------



## mandelbrot (6 Oct 2014)

Bronte said:


> Why?
> 
> He also mentioned a garden shed, I think this is an improvement and would not be claimable now, but would be under CGT if he sells the property?
> 
> Apart from wear and tear stuff, he needs to be careful on pre letting expenses not being allowed.



Re the kitchen, it depends on whether once fitted it becomes part of the fabric of the building. Generally a fitted kitchen would be regarded as a fixture (no W&T) rather than a fitting/chattel (and allowed for W&T).


----------



## Joe_90 (6 Oct 2014)

mandelbrot said:


> Generally a fitted kitchen would be regarded as a fixture (no W&T) rather than a fitting/chattel (and allowed for W&T).



That's my take on it.  Others disagree!!


----------



## Bronte (6 Oct 2014)

I used to agree with that before, but now I've been in business too long and kitchens need replacing after time. Same as flooring. Or even bathrooms.

What about the shed guys?


----------



## mandelbrot (6 Oct 2014)

Bronte said:


> I used to agree with that before, but now I've been in business too long and kitchens need replacing after time. Same as flooring. Or even bathrooms.
> 
> What about the shed guys?



Again it depends, does it have a foundation, is it moveable etc, but there may be a case for W&T there.


----------



## mandelbrot (6 Oct 2014)

Joe_90 said:


> That's my take on it.  Others disagree!!



HMRC and Irish Revenue would be among those who agree with you and I.


----------



## T McGibney (6 Oct 2014)

mandelbrot said:


> Generally a *fitted* kitchen would be regarded as a fixture (no W&T) rather than a *fitting*/chattel (and allowed for W&T).



Bit of a contradiction there?


----------



## Branz (6 Oct 2014)

Need to redo the logo on the van: Specialists in un-fitted (kitchens and wardrobes)


----------



## mandelbrot (6 Oct 2014)

T McGibney said:


> Bit of a contradiction there?



2 different contexts.

It's about degree of annexation.

You could fit a central heating system but it wouldn't be a fitting.


----------



## T McGibney (6 Oct 2014)

mandelbrot said:


> 2 different contexts.
> 
> It's about degree of annexation.
> 
> You could fit a central heating system but it wouldn't be a fitting.



But people don't casually refer to fitted central heating systems, like they do with fitted kitchens.


----------



## mandelbrot (6 Oct 2014)

T McGibney said:


> But people don't casually refer to fitted central heating systems, like they do with fitted kitchens.



I'm not sure what your point is, are you suggesting because its common name is a fitted kitchen it must be a fitting for tax purposes?

In which case I could see huge upsurge in the popularity of the fitted roof, the fitted chimney, and the fitted wall!


----------



## T McGibney (6 Oct 2014)

My point is that the fitted kitchen, unlike the roof, chimney or wall, is usually not an integral part of the structure and can normally be removed or replaced at will without affecting the structure - hence it should qualify for capital allowances as a fitting.

PS, fitted roof, fitted chimney, and fitted wall are not commonly used terms either.


----------



## mandelbrot (6 Oct 2014)

T McGibney said:


> My point is that the fitted kitchen, unlike the roof, chimney or wall, is usually not an integral part of the structure and can normally be removed or replaced at will without affecting the structure - hence it should qualify for capital allowances as a fitting.
> 
> PS, fitted roof, fitted chimney, and fitted wall are not commonly used terms either.



I think a characteristic would be that the asset itself, i.e. the kitchen having been so removed would still be capable of being fitted elsewhere - that it wouldn't have been damaged beyond usefulness, and that it would actually be practical to install it somewhere else again.

I said as much in my original post here "Re the kitchen, it depends on whether once fitted it becomes part of the fabric of the building" - it depends. If there's enough fitting involved (as with a central heating system), when you remove it, all you'll have is firewood (or a load of pipe).

But sometimes I think you just enjoy arguing with me for the fun of it Tommy


----------



## T McGibney (6 Oct 2014)

mandelbrot said:


> I think a characteristic would be that the asset itself, i.e. the kitchen having been so removed would still be capable of being fitted elsewhere - that it wouldn't have been damaged beyond usefulness, and that it would actually be practical to install it somewhere else again.
> 
> I said as much in my original post here "Re the kitchen, it depends on whether once fitted it becomes part of the fabric of the building" - it depends. If there's enough fitting involved (as with a central heating system), when you remove it, all you'll have is firewood (or a load of pipe).



Yes, it depends to some extent on the individual situation and more particularly the level of customisation of the unit(s). 



mandelbrot said:


> But sometimes I think you just enjoy arguing with me for the fun of it Tommy


----------



## Bronte (7 Oct 2014)

mandelbrot said:


> It's about degree of annexation.
> 
> .


 
That's good Mandelbrot, I like it, I'm going to save that up to use on the revenue auditors if they arrive at my door.


----------



## Bronte (7 Oct 2014)

mandelbrot said:


> Re the kitchen, it depends on whether once fitted it becomes part of the fabric of the building. Generally a fitted kitchen would be regarded as a fixture (no W&T) rather than a fitting/chattel (and allowed for W&T).


 
Would just like to point out that kitchens can be unfitted and sold off even.


----------



## Bronte (7 Oct 2014)

T McGibney said:


> My point is that the fitted kitchen, unlike the roof, chimney or wall, is usually not an integral part of the structure and can normally be removed or replaced at will without affecting the structure - hence it should qualify for capital allowances as a fitting.
> 
> .


 
I agree with this interpretation.  Ikea actually do 'unfitted' kitchens, as in stand alone units. 

Really when you think about it, a kitchen is cupboards really, just they're tacked to the wall, they are in essence furniture for storing stuff.  And they suffer wear and tear, and get damaged over time.  I have a lovely kitchen sideboard in one unit with the shape of an iron in the formica !


----------



## Bronte (7 Oct 2014)

mandelbrot said:


> I think a characteristic would be that the asset itself, i.e. the kitchen having been so removed would still be capable of being fitted elsewhere - that it wouldn't have been damaged beyond usefulness, and that it would actually be practical to install it somewhere else again.


 
I think times have moved on and people change their kitchens much as they do their living room suite.  They are seen as having an end to their useful life and need replacing.  

What say you to a kitchen that is replaced because it's knackered?


----------



## drunat (9 Oct 2014)

Thanks all. The shed is just for storage. there is foundation but it's a metal shed and can be moved.
What about carpets/underlay/flooring, tiling, toilets, sink? Are they all repairs then?
So am I right in understanding that it's either capital write off over 8 years(i.e. wear and tear) or repairs that can be written off 100% in one year.


----------



## Bronte (10 Oct 2014)

The third write off is capital expenditure/enhancement. In your example, if your shed was a permanent structure you would when you sell the house be able to use that to bring down your CGT calculation.


----------



## Manuel (30 Oct 2014)

Hi folks,
Can you help me regarding which category of expenditure for tax purposes these fall under:

- Re-sanding and re-treatment of my timber floor
- Insulation upgrade (attic insulation and pumped cavity wall insulation)

Many thanks,
/M.

P.S. Yes, leaving it til the last minute, like every other year ...


----------



## elcato (30 Oct 2014)

> - Re-sanding and re-treatment of my timber floor
> - Insulation upgrade (attic insulation and pumped cavity wall insulation)


I would say (personally) that this would be repairs and full claimed on the year in question that it was done. That is how I would and have treated it.


----------



## Delboy (30 Oct 2014)

Manuel said:


> P.S. Yes, leaving it til the last minute, like every other year ...



Is the online filing date with ROS mid November (as it was last year) or is it 31st October?
I was working under the belief it was the same as last year but have to say, I cannot find anything on ROS to confirm this!!!


----------



## Bronte (31 Oct 2014)

elcato said:


> I would say (personally) that this would be repairs and full claimed on the year in question that it was done. That is how I would and have treated it.


 
I agree with this.


----------



## Delboy (31 Oct 2014)

Delboy said:


> Is the online filing date with ROS mid November (as it was last year) or is it 31st October?
> I was working under the belief it was the same as last year but have to say, I cannot find anything on ROS to confirm this!!!



Rang the Rev Comm and they confirmed the 13th Nov as the deadline for online returns


----------

