Replacement windows can the cost be "capital"

Can replacement windows be treated as a capital cost rather than a revenue cost

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HMRC have helpfully said that generally replacement windows can be treated as revenue expense which in most situations is preferable from a tax perspective.

My client has replaced alot of old windows with some much better new windows which certainly represent an improvement on the old. However it would suit my client better from a tax perspective to treat the windows as a capital expenses rather than a revenue expense. 

Is it okay to do this?

Replies (9)

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By Accountant A
12th Jun 2018 16:52

I think without understanding why the client would be advantaged by the treatment, it's difficult to say. Generally, a cost is what it is not what the client wants it to be.

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By ireallyshouldknowthisbut
12th Jun 2018 17:07

Have the window opening's changed?

Did your client buy at significant undervalue due to poor windows and these purchased prior to first lettings?

Why is there significant improvement? Ie surely the householder can still see out as before?

In my period property, the 200 year old sash windows are much better than the 20 year old replacements which are rubbish.

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ALISK
By atleastisoundknowledgable...
13th Jun 2018 08:05

Pretty sure if it’s double glazed v single glazed then it’s capital ...

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Replying to atleastisoundknowledgable...:
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By SkyBlue22
13th Jun 2018 09:00

My understanding was that if the old 'standard' windows are being replaced by new 'standard' windows then it's revenue. It's only capital if the new windows are much better than the standard fare.

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Replying to atleastisoundknowledgable...:
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By Wanderer
13th Jun 2018 09:10

atleastisoundknowledgable... wrote:

Pretty sure if it’s double glazed v single glazed then it’s capital ...

Er no:-
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-work...

"Replacing a part of the property with the nearest modern equivalent is still a repair if the improvement is incidental to the repair, such as replacing a single-glazed window with a double-glazed window."

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By SteveHa
13th Jun 2018 10:03

Of course, the replacement could mean plywood frames replaced by solid mahogony, and plain panes replaced by diamond and laser cut pattern windows.

We don't know.

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By possep
13th Jun 2018 12:47

By atleastisoundknowledgable...

13th Jun 2018 08:05
Pretty sure if it’s double glazed v single glazed then it’s capital ...
No, that changed donkeys years ago so it isn't capital

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By Openhouse
14th Jun 2018 14:42

It was tatty old wooden frames replaced by nice Upvc windows.

I know HMRC are happy to treat replacement using modern materials as repairs and maintenance just wondered if it was a requirement to treat the expense like that or whether it was a concession of some sort by HMRC.

The windows are certainly a huge improvement on what was there before indeed if you google Anglia Windows it says "improving" homes for over 50 years!!

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Replying to Openhouse:
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By Tax Dragon
14th Jun 2018 15:20

No, not a concession - a recognition of reality.

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