Furniture for lodgers as an expense?

by Readers Question

10:49 AM, 10th July 2017
About A year ago

Furniture for lodgers as an expense?

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Furniture for lodgers as an expense?

Hello

I’ve read the article about “Capital v revenue expenditure on the first Refurb” , very informative.

If after moving in to my residential property I were to furnish an empty room for a lodger, would that be an allowable expense?

Likewise if I were to simply replace the old furniture in lodger bedroom, and re-decorate would that be an allowable expense?

Final Question – If I am not living at my home (working abroad), can I claim all bills as expenses? I imagine my accountant may have been only apportioning them while I was living there.

Thank you for any feedback!

Greatly appreciated

Rich



Comments

Neil Patterson

11:26 AM, 10th July 2017
About A year ago

Hi Rich,

Under the .Gov rent a room scheme it gives you two options >> https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

"The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.

You can let out as much of your home as you want.
How it works

The tax exemption is automatic if you earn less than the threshold. This means you don’t need to do anything.

You must complete a tax return if you earn more than the threshold. From 6 April 2016, this is £7,500. For the 2015 to 2016 tax year, the threshold was £4,250.

You can then opt into the scheme and claim your tax-free allowance. You do this on your tax return.

You can choose not to opt into the scheme and instead record your income and expenses on the property pages of your tax return."

If you are not living in the property you can no longer automatically claim 10% repair costs, but have to record repair expenses that are replacements, but not additional capital expenses that are deducted from CGT rather than income tax.

Neil Patterson

11:29 AM, 10th July 2017
About A year ago

Mandy Thomson

16:53 PM, 10th July 2017
About A year ago

Reply to the comment left by "Neil Patterson" at "10/07/2017 - 11:26":

Hi Rich

Neil is spot on - glad to see the abolition of the wear and tear allowance doesn't apply to resident landlords.

Rich Green

13:01 PM, 31st July 2017
About A year ago

Reply to the comment left by "Neil Patterson" at "10/07/2017 - 11:26":

Thank you for your reply.

I'm unclear from the reply, if I furnish an empty room for a lodger, would that be an allowable expense?

Mandy Thomson

8:20 AM, 1st August 2017
About A year ago

Reply to the comment left by "Rich Green" at "31/07/2017 - 13:01":

You can't claim for providing an asset that didn't exist before, you can only claim for a replacement. For example, if you bought a bed especially for your lodger, and there was no bed previously, you couldn't claim but if you were replacing an old bed you could.

Rich Green

17:07 PM, 26th August 2017
About A year ago

Many thanks for the additional reply and link Neil


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