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Rental income


  • Repairs will include the maintenance and replacement (like for like) of existing installations of the following:
  • Furniture, curtains and carpets (including fitting costs);
  • Fires, boilers, radiators, cylinders, pipework and the cost of installation;
  • Sanitary ware, associated pipework and the cost of fitting (but not the cost of any tiling);
  • Smoke detectors, alarms, emergency lighting, fire doors, fire escapes and other fire prevention measures;
  • Kitchen units (but not the cost of tiling) and;
  • The cost of the electrical installation and supply of immersion heaters, showers and extractor fans;
  • Costs of re-guttering, renewing existing plumbing systems;
  • Re-roofing, re-flooring, re-plastering.
  • Capital expenditure (e.g. altering or improving the land/property, legal expenses in purchasing or selling the land/property) are not allowable
Provided that the premises in respect of which the rental income is received are being used for such purposes  capital allowances will be granted against the rental income to the same extent that they would be allowed if the lessor was carrying on the trade.

If the rental income arises from residential properties there is no allowance for capital expenditure. However, by concession and subject to the following conditions, certain capital allowances are now to be granted.



  • The concession will only apply to properties that are available for permanent letting for residential purposes. Permanent letting means that the property is intended to be available for let for a continuous period exceeding 5 years.
  • There will be a 10% straight line allowance for the cost of any qualifying capital expenditure as defined in (i) below.
  • There will be no balancing charges or allowances when the property is transferred from one owner to another provided that the property continues to be available for permanent letting.
  • Balancing charges or allowances will be calculated when the property ceases to be available for permanent letting (whether on disposal or not based on the market value of the assets at that time).

Qualifying capital expenditure will follow the normal capital allowances rules. As a guide the first time expenditure on those items listed at 3(a) will qualify.

Expenditure which does not qualify for capital expenditure includes:-

  • Expenses already admitted as a revenue deduction (i.e. repairs).
  • Structural additions, alterations, modifications, expansions and improvements to the property including re-divisioning or partitioning and creating car parking facilities.








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