Q: I have replaced the fitted kitchen in my rental property, is this an allowable expense or is it capital?
A: Provided the kitchen is replaced with a similar standard kitchen and does the same job as before, then this is a repair and the expenditure is allowable. If the kitchen is substantially improved, for example if standard units are replaced by expensive high quality materials or the layout is significantly changed, then the expenditure would be capital. You can find further information via these links: Income tax when you rent out a property: working out your rental income and Property income manual 2020.
Q: I have replaced the old boiler in my property. The gas fitter has told me he has to fit a condensing boiler. Is this a repair or an improvement?
A: As long as the new boiler is the closest equivalent in capability, then the replacement boiler will be a revenue repair. It is important to look at the position when the work is carried out. As technology and industry practice change over time, there will be changes in what amounts to simply repairing the asset. Something that was seen as an improvement ten years ago may now be the industry standard for that type of work, for example due to changes in building/safety regulations. Further information can be found at:
Income tax when you rent out a property: working out your rental income
and Business income manual 46920 and Business income manual 46925.
Q: Is the replacement of wooden windows with UPVC an allowable expense?
A: At one time, replacing single glazed windows with double-glazing was an improvement. Over time, double-glazing became the industry norm. This meant that replacing single glazing with double-glazing ceased to be an improvement, and capital expenditure, and became allowable expenditure for tax purposes as it was simply replacing like with currently available like. There is further guidance here: Business income manual 46925.
Q: Now that the wear and tear allowance has been replaced, does that mean that I can claim the cost of white goods, furniture, carpets etc?
A: You can claim a deduction for the cost of replacing domestic items such as moveable furniture, household appliances and other furnishings like carpets and floor coverings. The initial cost of purchasing these items is not a deductible expense, it is only when you replace them. The deduction for replacement items is capped at the equivalent cost of the same type of item if you upgrade it, for example to replace a standard sofa with a sofa bed.
It is worth mentioning that domestic items does not include fixtures such as kitchen units, boilers, baths etc. When these are replaced, tax relief may be available on the basis that this is a repair to the property as a whole. For further information, please see Income tax when you rent out a property: working out your rental income.
Q: I have replaced a washer with a washer-dryer in my rental property, can I claim this?
A: Where the replacement is an improvement of the original domestic item, the allowable deduction is limited to the cost of purchasing an equivalent of the original item. For further information, please see ‘Expenses you can claim for replacement of domestic items’ here: Income tax when you rent out a property: working out your rental income.