Allowable expenses when calculating the capital gain on a property.
A dilapidated property was purchased in 2005 as a repossession. Some £20 000 was spent on refurbishment including replacement of the failed central heating and hot water systems and new double glazing. The kitchen and bathroom were renewed which involved blocking and creating doorways. The garage was also partly rebuilt. The clients occupied the property as their main residence for four years and then rented it out for a further six and a half years until it was sold.
I am struggling with the line between property maintenance and improvement. If this were purely a business proposition in which a property was bought improved and sold I assume that the costs of major refurbishments such as new flooring kitchen bathroom double glazing central heating rewiring and the like would count as allowable improvements that increase the resale value of...
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