There are special rules for the pre-trading expenses of a rental business. If the expenses were in relation to a letting, then a deduction may be allowed where the following conditions are met:
This means that, to be allowable, the expenditure must be incurred wholly and exclusively for the purposes of the rental business and must not be capital expenditure. HMRC gives the example whereby rent paid to lease the first rental business property could be allowable under these special rules if it is due before the property is first let, provided the property was acquired solely for the purposes of the rental business.
However, no relief would be allowed where pre-trading expenses were not incurred wholly and exclusively for the purposes of the rental business. Capital expenditure does not qualify for relief but there are also other special rules for capital allowances. Qualifying pre-commencement expenditure is treated as incurred on the day on which the customer first carries on their rental business.