I would like to get your advice on the following situation. I am buying a new house (for personal residency), and I'm going to rent my old one. I'm thinking of doing some repair works in that house prior to renting it, which would cost me a significant amount of money. Can those repair works be tax deductible from the rental income? I know for sure that if I already was in this "rental business", the costs would have been deducted from the tax. The issue is I'm not yet in, I'm only doing the preparations.

I believe that it depends on which repair works are needed. Some are tax deductible, some are not. I am pretty sure that capital repairs such as roof, walls, etc. are non-deductible.

If you are repairing buy to let property, then your repairs are tax deductable as they are classed as business expense. However you should not live in the property. If you already moved or moving, I think it should be OK. To be absolutely sure I would clarify this with your accountant. Make sure that you keep your receipts.

FMNOD, cat,
thanks for your responses.
so, does this means that even capital repairs are tax deductible? I need to fix the roof (in fact, I'm planning on laying a brand new roof), which is very expensive.

I agree with cat that as long as you no longer reside at the property, you can claim repairs as your business expenses. Tax is usually payable on rental income less costs of purchasing the property to let, its development and running the property. Did you also know that government introduced a LESA (landlords energy savings allowance) of £1500 max per building per year spent on buying and installing energy saving items. Loft insulation is among those just in case you were thinking of doing it up with the roof (IMG:style_emoticons/default/smile.gif) .