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New windows - "repair" or "capital improvement"

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Author Topic: New windows - "repair" or "capital improvement"  (Read 457 times)
Newbie
Posts: 35

I like property

« on: November 19, 2018, 04:54:01 PM »

The only thing I hate more than Mondays is SA...

Just wondering if to put last years window replacement down as a revenue expense, or whether I can class it as capital expenditure for CGT savings at a later date?

From what I've read it seems that replacing old wooden single glazed windows with modern double glazed units would typically be classed as "repairs" (since double glazing is now just a 'modern equivalent'). However, the flat, a period property, was bought a few years earlier at a price that reflected the state of the windows, which were single glazed and had badly rotting wooden frames. The new uPVC sash windows cost 12k and have added value to the property, imho by at least 12k.

To me, the window replacement is capital expenditure. However, I've a feeling HMRC wouldn't view it that way. PIM2030 says that it can be classed as capital expenditure if "the price paid for the property was substantially reduced because of its dilapidated state". Is 5% off the value a substantial reduction, do sh*t windows in an otherwise ok flat make it dilapidated? Does anyone with any tax/accounting experience have any thoughts?

The main reason I ask the question is that we won't get much benefit from including the cost of the windows in our expenses. Most of the BTL profit will fall within my wife's personal allowance. Hence it would be far better for us if the cost can be classed as a capital expense  :)
Global Moderator
Sr. Member
Posts: 365

I like poetry

« Reply #1 on: November 20, 2018, 10:40:41 AM »

Generally HMRC are on the lookout for people doing the opposite - trying to claim capital improvements as revenue items, so I don't think they'd have a problem with your treating upgraded windows as a capital item.
Newbie
Posts: 35

I like property

« Reply #2 on: November 20, 2018, 12:32:10 PM »

Thanks Simon, that's helped convince me not to bother including the cost of the windows in my (wife's) SA. The BTL profit is only just going to nudge income past the personal allowance, so very little benefit including it in the deductions. Will save the cost for CGT deductions if or when we sell up in the future...
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