Pre-Letting expenses on Vacant properties

Mumha

97(A) mentions "certain" pre-letting expenses are allowed. Is there any clarity on what expenses they are ?

Section 97A of the Taxes Consolidation Act 1997 inserted by the Finance Act 2017 provides that expenses incurred on a vacant residential premises prior to it being first let after a period of non-occupancy are authorised as a deduction against rental income from that premises.

I'm certain the house I have just done up over the last 8 months which was just let, qualifies (last lived in Jan 2015), but I can't see what is allowable.

I have sent off my SEAI forms, for the insulation, plumbing etc.
My builder and I have also gone through the HRI process.
This extra 5k would be a nice bonus, but Revenue appear to be their usual opaqueness on the subject.

Any advice would be great, thanks.

dr.fuzzenstein

I suppose if revenue is vague, just claim for everything and see what sticks.

VonBeanie

This link might help

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-08-11.pdf

Mumha

dr.fuzzenstein wrote: »

I suppose if revenue is vague, just claim for everything and see what sticks.

That's a fair point, I just have a natural dislike of the thought of paying money back to the Revenue !

Mumha

VonBeanie wrote: »

This link might help

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-08-11.pdf

Thanks, I had seen that but as was mentioned earlier, it is incredibly vague. I've totted up a fair chunk of the non SEAI & non HRI receipts and I'm up to over 8k.

I have stuff like

€4k on beds, wardrobes, lockers etc
€1,350 on blinds
€1k on Bath panels/Shower doors etc
€250 on Bath re-enamaling

davindub

Mumha wrote: »

Thanks, I had seen that but as was mentioned earlier, it is incredibly vague. I've totted up a fair chunk of the non SEAI & non HRI receipts and I'm up to over 8k.

I have stuff like

€4k on beds, wardrobes, lockers etc
€1,350 on blinds
€1k on Bath panels/Shower doors etc
€250 on Bath re-enamaling

Most of those are capital items, you claim capital allowances over 8 years while they are used in the letting.

Michael D Not Higgins

davindub wrote: »

Most of those are capital items, you claim capital allowances over 8 years while they are used in the letting.

This is true. OP, if you don't know what you can claim you might be better off getting a tax accountant involved.

nompere

dr.fuzzenstein wrote: »

I suppose if revenue is vague, just claim for everything and see what sticks.

Revenue won't routinely review a claim - so if you claim expenses that aren't allowable it will not come up until you get selected for audit. At that point it's not just repaying tax, it's interest and penalties as well.

Mumha

davindub wrote: »

Most of those are capital items, you claim capital allowances over 8 years while they are used in the letting.

But they were incurred before the first ever letting, and they were not part of a HRI & seai grant ? I've made an appointment to talk this through with an accountant, so I get anything definitive, I will report back.

davindub

Mumha wrote: »

But they were incurred before the first ever letting, and they were not part of a HRI & seai grant ? I've made an appointment to talk this through with an accountant, so I get anything definitive, I will report back.

They are still not expenses unfortunately.

Even without the preletting term, you can claim capital allowances on all your capital expenditure when you start letting the property.

But yes talk to the chartered tax advisor, good idea to do this in any case.