rental expenses

Rental expenses

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Hi

I have a client who owns a number of flats.  in 15/16 they replaced all storage heaters in the flats to radiators at a cost of approx £5k.  Is this an allowable deduction?  I have checked the HMRC guidance but i am not 100% sure.

Thanks in advance

Bob

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By goldriver
25th May 2016 07:52

The general position is that the cost of :
 a repair is normally allowable expenditure, but
 replacing the asset or of making a significant improvement to the asset as
a whole (the 'entirety') will be capital expenditure and not allowable as a
deduction.

Replacing an asset – Replacing a part is a repair to the larger asset,
replacing the whole asset is not a repair, and is not an allowable deduction for
tax purposes because it is capital expenditure

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Replying to David Cameron:
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By vince8
25th May 2016 10:19

I would proceed on the basis that you are replacing one sort of heating system with another. HMRC refer to modern technology in their manual examples and one refers to replacing wooden window frames with UPVC ones not being an improvement. Go go with it as a repair.

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