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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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.
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.
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.
Er no:-Pretty sure if it’s double glazed v single glazed then it’s capital ...
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."
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.
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