Readers' forum : Property renovations

Can readers advise on the tax position if a taxpayer lets a single property the tenant leaves and within a month or so the property is sold? In the month before sale £3 000 is spent ‘doing up’ the property.

HMRC’s Property Income Manual at PIM2510 states: ‘If the business only consisted of letting a single house it would cease when the tenant left and the taxpayer began to use the house as a private residence or alternatively when they decided the house wouldn’t be re-let. But the rental business wouldn’t stop if the taxpayer bought another property for letting at the same time.’ One could argue that the taxpayer intended to re-let but then decided to sell; however because there was an intention to re-let the costs were incurred while the letting business was still running and could be claimed as revenue...