Be careful. Pre-letting expenses are not deductible.
Be careful. Pre-letting expenses are not deductible.I'll take a chance - I can either be right or wrong and it's not going to be significant money either way.
Replacing, on a like-for-like basis (allowing for advancements in materials, etc), an item that has been damaged or is nearing the end of its useful life is certainly a repair.No it's not, it's a repair
I think you're getting bogged down in two things: New and 5K.Replacing, on a like-for-like basis (allowing for advancements in materials, etc), an item that has been damaged or is nearing the end of its useful life is certainly a repair.
However, the OP has just told us he spent €5,000 on installing a new bathroom - you're assuming the rest in arriving at a very definitive conclusion.
No Bronte, I'm not.I think you're getting bogged down in two things: New and 5K.
I now know that from my separate thread. It's a catch 22. If we moved the tenants in and did the work around them it would work tax wise - but very unfair to tenants and impractical.Be careful. Pre-letting expenses are not deductible.
I'm aware of that and would be sensible. It's been a few years since I had a rental property and made any returns. I didn't expect I'd be back doing it again. As I now know that I can't claim for pre-rental expenditure it would only be above board items going in - which when all the graft and expense has been done this year will be small money next year (s) when doing any returns. I might wait and install the boiler when there are tenants in situ though.It could be significant enough in 6 years time if Revenue decide you were wrong and add penalties and interest.
Not trying to scare you, but you should get advice on this.
Landlords don’t go around fitting new bathrooms unless they have to.No Bronte, I'm not.
I pointed out earlier in this thread that a relative of mine sold a holiday home a couple of years ago and claimed (on the advice of her accountant) a bathroom refurbishment as an enhancement for CGT purposes. Revenue queried this but ultimately accepted this deduction.
Every case is obviously fact specific but in that case the refurbishment very clearly added value to the property at the time it was sold.
The OP didn’t tell us that he replaced items on a like-with-like basis or even that there was anything wrong with the existing bathroom that required replacement. You added all these details yourself to arrive at a very definitive conclusion.
To increase the value of the property! You know, an enhancement on what was already there.Why was the refurbishment done.
Well as a landlord I only do bathrooms because I have to! Not to increase the value. And I did not do them to the level I have in my own home. But if I were renovating a property with a view to selling then I’d approach the matter in an entirely different way.To increase the value of the property! You know, an enhancement on what was already there.
With respect @Bronte, this thread is not about what you do or don't do.
It is entirely possible that a landlord outside a RPZ would seek to improve their property to increase its rental potential.
I'm not trying to play devil's advocate.
I'm simply pointing out that capital expenditure on a property improvement is not deductible in calculating rental profit. But it is deductible in calculating a capital gain.
That's not an opinion - that's simply what the tax code provides.
I've said repeatedly on this thread that every case is fact specific.
I don't see any point in offering a very definitively stated opinion on the basis of a fact pattern that is "exponentially more likely" (whatever that means).
I just offer an opinion (that can be accepted or ignored - no skin off my nose) on the basis of what we have been actually told. Not imagined or assumed.
I'm simply pointing out that capital expenditure on a property improvement is not deductible in calculating rental profit. But it is deductible in calculating a capital gain.
Yes, I disagree.Hold on.
Take this back to the OP’s question - he is looking for an income tax deduction if one is available.
The answer to that is, in effect, yes. In the absence of evidence to the contrary, Revenue will accept expenditure of the type outlined by the OP, as repairs / renewals, if that is how the OP characterises it.
Do you disagree?
Yes, I disagree.
The answer is that replacing an item on a like-for-like basis, allowing for advances in materials, that is damaged or is nearing the end of its useful life is a repair.
I've already pointed to a case where Revenue accepted that a bathroom refurbishment was an improvement.
Again, every case is fact specific - there's no "default" position.
I've already pointed to a case where Revenue accepted that a bathroom refurbishment was an improvement.
Equally there's nothing to suggest that it wasn't an enhancement. You're still making assumptions.there’s nothing to suggest enhancement / improvement beyond the normal (bog!) standard.
Revenue requested details and copy invoices. Correspondence only, no meetings.Out of interest how come revenue queried the CGT return and in what circumstances was the enhancement explaination accepted by the revenue official. Was it a meeting or what?
Interesting. Do you have any idea why? Was the enhancement so high that it triggered something do you think. I keep all my receipts till I die. Just in case. Just for revenue. Something my old boss told me when he got caught for 2 million.Equally there's nothing to suggest that it wasn't an enhancement. You're still making assumptions.
Revenue requested details and copy invoices. Correspondence only, no meetings.
It's really not that unusual for Revenue to raise queries on tax returns.Do you have any idea why?