What are you using to track Portfolio / income / expenses?
3 years ago | 18 comments
Capital cost vs allowable expense?
12:03 AM, 30th January 2023, 3 years ago
5
Hello, Would reinstatement (like for like) following an accident to a property be considered a capital cost or allowable expense vs income?
My instinct is to view it all as maintenance/repair because there was damage which needed attention to get it back to how it was prior to the accident.
However, if the damage was too great and what needed to happen (with part of the works/costs) was a total replacement (albeit like for like: the building is in a conservation area so cannot be materially changed…) would this be viewed as a capital cost by HMRC?
It is a balcony that needed replacement railings plus waterproofing to the balcony.
I would view the railings and balcony as one unit (couldn’t have the balcony without the railings as people would fall off it!) and so even if the railings were replaced in their entirety, then it would be viewed as a repair to a single unit?
I’d be interested in people’s thoughts.
I do not have any desire for one outcome or the other, just want to do what is correct and find this such a grey area!
Thank you,
N O
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Member Since November 2022 - Comments: 1
10:48 AM, 30th January 2023, About 3 years ago
That’s a repair in my book, you’re maintaining something that’s already there, not installing as an additional feature
Member Since October 2022 - Comments: 5
5:26 PM, 30th January 2023, About 3 years ago
Reply to the comment left by Dean Warner at 30/01/2023 – 10:48
I agree totally with Dean.
In a similar vein, I believe replacing old timber windows with double glazed Upvc to enhance an EPC rating is also against revenue not capital
Member Since September 2018 - Comments: 3515 - Articles: 5
11:03 AM, 31st January 2023, About 3 years ago
Reply to the comment left by Jeff Niehorster at 30/01/2023 – 17:26
whereas replacing completely rotten wood windows with UPVC is capital expenditure?
Member Since October 2022 - Comments: 5
12:21 PM, 31st January 2023, About 3 years ago
Thanks,can you please explain why that is.
What about replacing a worn out kitchen,do you think that is capex
Regards
Member Since June 2014 - Comments: 325
9:43 AM, 4th February 2023, About 3 years ago
Consider both changing wood windows to uPVC and replacement of kitchen to be revenue expenses, as replacing what already exists.