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Where Taxpayers and Advisers Meet

Windows and boiler replaced

rks2018
Posts:63
Joined:Sun Sep 16, 2018 1:27 pm
Windows and boiler replaced

Postby rks2018 » Mon Oct 01, 2018 10:50 am

Hello Can anyone advise me if I dont claim to offset rental income on expenditure on all windows replaced due to determination rotten windows ect can I use the the cost against the CGT when I sell ? Inc boiler ?/
Thanks

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Windows and boiler replaced

Postby SteLacca » Mon Oct 01, 2018 3:22 pm

You need to determine whether the costs are repairs or improvement. If repairs then you should claim against rental income. If improvement then you can't claim against rental and will claim against capital gains instead.

rks2018
Posts:63
Joined:Sun Sep 16, 2018 1:27 pm

Re: Windows and boiler replaced

Postby rks2018 » Wed Oct 03, 2018 12:20 pm

Thanks . Is it better then to claim against cgt when sell ?thanks

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Windows and boiler replaced

Postby SteLacca » Thu Oct 04, 2018 10:34 am

It depends. As a general rule, however, if you are a basic rate taxpayer (including the gain) CGT relief would only be at 18% whilst relief from rental income will be at 20%. For a higher rate taxpayer the comparative rates are 28% and 40%

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Windows and boiler replaced

Postby bd6759 » Sat Oct 06, 2018 10:29 am

Just to be clear... you do not have a choice.

Revenue expenses such as repairs cannot be claimed against CGT.

Capital expenses cannot be claimed against income tax, but may be claimed against CGT if they enhance the asset.

rks2018
Posts:63
Joined:Sun Sep 16, 2018 1:27 pm

Re: Windows and boiler replaced

Postby rks2018 » Sat Oct 06, 2018 3:12 pm

Okay , so from your advice it seems that the windows are the ones I can claim relief on CGT as they do enahnce and have improved property . But
I can only claim against tax payable on boiler .
I am higher rate of tax payer and my sister is lower ( joint owners at present )
Thank you

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Windows and boiler replaced

Postby robbob » Mon Oct 08, 2018 9:02 am

Looking at the advise on the property income manual page hmrc would normally class the closest available Like-For-Like replacement of part of the building structure as a revenue repair item using the logic per the text copied below.
Note it depends on the detail of the work being done - single glazing to double glazing counts as revenue repair on that basis. Install something above and beyond the nearest Like-For-Like replacement and you are moving towards improvement and the costs being treated as capital or part capital.

Problems can arise where the customer does work on an old asset. A repair or replacement of a part of a building using modern materials may give an apparent element of improvement because of the greater durability, superior qualities and so forth of the new material. But the cost normally remains revenue expenditure where any improvement arises only because the customer uses new materials that are broadly equivalent to the old materials.

Similarly, alterations due to advancements in technology are generally treated as an allowable repair rather than an improvement, if the functionality and character of the asset is broadly the same. For example, when single glazing is replaced with double glazing.
Further details via this link

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2030

Martintaxes
Posts:37
Joined:Fri Apr 28, 2017 12:25 pm

Re: Windows and boiler replaced

Postby Martintaxes » Tue Nov 13, 2018 4:06 pm

Ive replaced boilers and windows on most of my houses and put this down against tax. If I changed them every year or two it would be suspicious. But if they come out 15 plus years they are worn out and its maintenance not upgrades.
Leaky roof? If I replace a few tiles and it continues to keep dropping them then the whole roof needs replacing, and is not an improvement.
If I deliberately change my kitchen from a basic Ikea to a top of the range 20k type then thats improvement and therefore capital.


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