The peer, a work and pensions spokesman, used public funds to buy carpets, curtains and bathroom furniture for his Westminster flat from stores including John Lewis and Fired Earth.
He made the purchases after announcing in April 2004 that he would retire as MP for Roxburgh and Berwickshire at the general election in May 2005. During his final year in the Commons, he claimed a total of £18,806 in allowances for the flat, which he bought for £182,500 in 2001.
These included about £670 a month to pay the interest on its mortgage. He then sold it in May 2007 to his daughter Holly, 31, a journalist for Country Life magazine, for £100,000. On Tuesday he said the flat had been valued at £225,000.
Three weeks before the sale, a flat in the same building sold for £358,000.
When he made the claims, Lord Kirkwood, then Sir Archy Kirkwood, sat on the House of Commons commission which was overseeing the first publication of basic details of MPs' expenses. As the details were published in October 2004, he said that he welcomed the fact that "taxpayers can really see how their money is being spent".
However, he dismissed suggestions that voters would be shocked by the amount of money involved. "I'm not saying it's an insignificant sum, but it's pretty small beer," he said.
Between November and December 2004, Lord Kirkwood claimed more than £3,000 for carpets and flooring for his kitchen and bathroom from John Lewis. He also claimed £94 for a lavatory paper holder and tiles from Fired Earth.
In April 2004, the month he announced his intention to step down as an MP, he claimed £200 for repairs to the flat's electrics. In June 2004, he claimed £50 for fans. In July he claimed £660 for unspecified work by a contractor.
Over the following months, he returned to John Lewis to buy a £207 bathroom cupboard and mirror, curtains for £90 and lighting worth £72.
In February 2005, he claimed £145 for a clothes rail and storage devices, £78 for kitchen stools and £56 for roller blinds. He also claimed £115 for computer equipment through his office expenses two months before he retired.
Lord Kirkwood, 63, had designated as his main home a house in Selkirk where he still lives with his wife Rosemary.
He claimed more than £63,000 in House of Lords allowances last year, including £20,019 on overnight subsistence: the Lords' equivalent of second home allowances.
He claimed £11,419 in "day subsistence" allowances, £11,419 in office running costs and £9,741 in travel costs.
Lord Kirkwood, who was knighted for services to Parliament in 2003, was one of five Lib Dem MPs put forward for peerages by Charles Kennedy, the then party leader, after the 2005 election. He announced his retirement after it was decided that his seat should merge with that of Tweeddale, Ettrick and Lauderdale, which was held by Michael Moore, a fellow Lib Dem.
Lord Kirkwood said yesterday: "When I sold the flat to my daughter a professional valuation was secured on the property. It was valued at £225,000. This was declared for capital gains.
"The fuse box and wiring system was unsafe and needed to be replaced. There were some costs of relaying flooring in parts of the property."
SNAPSHOT
Lord Kirkwood of Kirkhope
Job: Former Lib Dem MP for Roxburgh and Berwickshire
Salary: £57,485 in 2004
Total second home claims
2004-05: £18,806
2005-06: £372
2006-07: N/A
2007-08: N/A
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