12.5% or full amount - how to decide category re rental income returns

Window1

Hi – this is only my 2nd year filling in tax returns where I have to add to my PAYE some rental income from becoming an accidental landlord, so still learning the ropes and have a few questions if anyone could help me with please. I got some great help here last year on my first attempt so hopefully I am a little more knowledgeable this time round!

Are the following something that go in at the 12.5% for each of 8 years or can any of them go in in full for 2019? and I guess for future reference how does one know which category they should go into?

(1)Replacing doors on boiler house/shed; repairing roof on boiler house/shed; repairing concrete yard (€1200)
(2)Replacing doors and windows in house (€5950)
(3)Servicing alarm and repairing after new windows/door fitted (€225)
(4)Replacing leaking hot water cylinder (€400)

I am thinking items 3 and 4 can go in in full but not sure and definitely don’t know re items 1 and 2 – both were necessary but are they the 12.5% or in full?

I think I am correct in believing that other smaller outlays like chimney cleaning, fire extinguisher/blanket, carbon monoxide alarms, kettle can be claimed in full?

A final question – can you claim for heating oil bought (c€200) while house was vacant between tenants to keep it aired and then remainder of it was left in tank for new tenants? I am thinking probably not!

Many thanks

Calahonda52

IMO,
only 3 can be expensed in full as its repairs and maintenance.
All the rest are capital so 12.5% capital allowances.

Oil is an expense

Window1

Calahonda52 wrote: »

IMO,
only 3 can be expensed in full as its repairs and maintenance.
All the rest are capital so 12.5% capital allowances.

Oil is an expense

Thanks for the reply. I was sure that replacing a hot water cylinder could be claimed in full as the old one began to leak ? So is it that if we had tried to mend the old one for argument sake (it wasn't possible to mend) the repairs could be claimed in full but because we bought a new one (the only option in reality) we can only claim the 12.5% each year for 8 years?

Calahonda52

yes CAPEX vs OPEX

Marcusm

Window1 wrote: »

Thanks for the reply. I was sure that replacing a hot water cylinder could be claimed in full as the old one began to leak ? So is it that if we had tried to mend the old one for argument sake (it wasn't possible to mend) the repairs could be claimed in full but because we bought a new one (the only option in reality) we can only claim the 12.5% each year for 8 years?

I would argue that the replacement of a subsidiary component (cylinder) of a heating system is a repair/renewal to maintain the heating system in working order. The cylinder is no more an asset in its own right than is a window lock or a pane of glass.

Window1

Marcusm wrote: »

I would argue that the replacement of a subsidiary component (cylinder) of a heating system is a repair/renewal to maintain the heating system in working order. The cylinder is no more an asset in its own right than is a window lock or a pane of glass.

Thanks to all for the replies.

I am finding more and more that all of this seems completely open to interpretation! I guess in the bigger scheme of things it makes no difference in the end - either you get all the relief in the year of purchase or you get it all eventually by year 8! Being only the 2nd year into this, it strikes me also that by the later years there will be so many 12.5%s accumulating/being brought forward from the previous years that there might be no tax due at all!!

Another thing that struck me from trying to find out what's what in this area is to do with expenses between tenancies - the Revenue literature says some expenses between tenancies may be eligible - but then doesn't go on, as far as I could see, to say which ones "may" be eligible! I think maybe paying an accountant to do the return might be the way to go next year!

Will Yam

Window1 wrote: »

Thanks to all for the replies.

I am finding more and more that all of this seems completely open to interpretation! I guess in the bigger scheme of things it makes no difference in the end - either you get all the relief in the year of purchase or you get it all eventually by year 8! Being only the 2nd year into this, it strikes me also that by the later years there will be so many 12.5%s accumulating/being brought forward from the previous years that there might be no tax due at all!!

Another thing that struck me from trying to find out what's what in this area is to do with expenses between tenancies - the Revenue literature says some expenses between tenancies may be eligible - but then doesn't go on, as far as I could see, to say which ones "may" be eligible! I think maybe paying an accountant to do the return might be the way to go next year!

The “between lease” payments are allowable provided

1. The landlord does not occupy the property during the vacant period

2. The property is subsequently let

3. The expenses would be deductible under the normal rules

Will Yam

Window1 wrote: »

Thanks to all for the replies.

I am finding more and more that all of this seems completely open to interpretation! I guess in the bigger scheme of things it makes no difference in the end - either you get all the relief in the year of purchase or you get it all eventually by year 8! Being only the 2nd year into this, it strikes me also that by the later years there will be so many 12.5%s accumulating/being brought forward from the previous years that there might be no tax due at all!!

Another thing that struck me from trying to find out what's what in this area is to do with expenses between tenancies - the Revenue literature says some expenses between tenancies may be eligible - but then doesn't go on, as far as I could see, to say which ones "may" be eligible! I think maybe paying an accountant to do the return might be the way to go next year!

For relatively small amounts of CAPEX - e.g. a few new mugs or some such, - i always expense it.

Not technically correct but pragmatic.