Capital or expense for rented property

Which way to jump

Didn't find your answer?

I'm preparing a client's 2017-18 tax return. In her rented property "expense" schedule she has included a new boiler - £5000

I raised the query about whether it was a like for like replacement and got the following reply by return

"There was no central heating in the property - so the boiler and rads were all new. The panel heaters weren’t up to keeping the place warm and dry and we were getting mould problems. Not sure if that helps!"

Should I perhaps allow some cost for curing the mould, some for replacing the panel heaters with the balance as capital. Or am I being too pure?

Useful hints from anyone who's had a similar problem would be most welcome

Replies (10)

Please login or register to join the discussion.

avatar
By Accountant A
07th Aug 2018 17:19

Capital improvement vs revenue cost was the subject of a long thread last week if you search. Very similar issues.

Thanks (0)
Replying to Accountant A:
By kenny achampong
08th Aug 2018 13:46

Ive been meaning to have a moan about this for a while, but whenever I search for anything here the matches are nearly all totally unrelated. So I just searched "Capital improvement vs revenue" in 2018 and there's only one match and that's regarding Uber taxis. Am I searching in the wrong place or something ? Does anybody else have the same problem ?

Thanks (0)
Replying to kenny achampong:
avatar
By Accountant A
08th Aug 2018 14:41

kenny achampong wrote:

Ive been meaning to have a moan about this for a while, but whenever I search for anything here the matches are nearly all totally unrelated. So I just searched "Capital improvement vs revenue" in 2018 and there's only one match and that's regarding Uber taxis. Am I searching in the wrong place or something ? Does anybody else have the same problem ?

The site search facility is hit and miss. You can use Google to search the site by including "site: accountingweb.co.uk" in your search.

Thanks (0)
avatar
By Accountant A
07th Aug 2018 17:18

Duplicate

Thanks (0)
avatar
By possep
07th Aug 2018 17:33

capital

Thanks (0)
avatar
By Tax Dragon
07th Aug 2018 19:54

Too pure? It's capital and only capital, from what you say.

possep was more succinct.

Thanks (0)
ALISK
By atleastisoundknowledgable...
08th Aug 2018 08:30

Capital

Thanks (0)
Portia profile image
By Portia Nina Levin
08th Aug 2018 14:53

Revenue!
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Nah. Kidding!

Thanks (0)
avatar
By Accountant A
08th Aug 2018 15:32

I suppose it depends how adventurous you are. I was firmly capital on the recent question referred to.

HMRC manual says "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."

Maybe you could construct an argument that replacing (what I understood to be a storage heating 'system') with a conventional gas central heating system is replacing in line with a modern equivalent. Are storage heaters still widely used in new build properties?

I'd never heard of this case which the HMRC manuals quote:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim35480

Thanks (0)
avatar
By bernard michael
08th Aug 2018 15:37

Thanks everyone. I've decided to capitalise it

Thanks (0)