Business tax: Repairs to let property
In C Wills v HMRC (TC00479 – 18 May) an individual (W) claimed a deduction of £43 665 for substantial repairs to an old building which he let to tenants.
HMRC issued an amendment disallowing the deduction on the grounds that this was capital expenditure. W appealed. The First-Tier Tribunal allowed his appeal applying the principles laid down in Conn v Robins Bros Ltd Ch D (1966) 43 TC 266 and finding that 'the disputed work undertaken was one of essential repair'.
Why it matters: This case indicates that the long-established case law illustrating the distinction between capital and revenue expenditure may still be relevant. HMRC do not always interpret the law correctly and where HMRC cites a tax case as an authority for rejecting a claim it will usually be worth consulting a textbook such as Tolley's...
