I'm completing my CGT return in connection with the sale last year of my
late Mother's property. I had always assumed that the cost of double
glazing for this property, (which was done in the years 2000 to 2002),
being a capital expenditure, would be allowable in reducing the tax
payable. However, a recent call to HMRC produced the response that this
is not the case, and that "improvements" only applied to such things as 
the building of an extension or garage. When I replied that we had not 
previously been allowed
to offset this against rent received, the adviser said "you should have
done", I was puzzled, as the relevant passages in the Taxation of Rents
guide, IR150 state:

Capital Expenses:

(128) It is a general income tax principle that you can't deduct capital
expenses in computing your taxable income.....

and

(145) Where a significant improvement arises from the change of
materials, the whole cost is capital expenditure.......for example, if
you replace single glazed softwood windows with double glazed PVC
windows. the improvement element normally means that the entire cost is
capital expenditure.

Am I missing something here? Surely, not having been able to offset
against rent, I should now be allowed to offset against CGT.  I haven't 
been able to find any definition of what constitutes an improvement in 
any HMRC document.

I emphasize that the work involved was a complete replacement of wooden 
single glazed windows with sealed double glazed PVC units.

Any help and advice would be appreciated.

"Mike O'Sullivan"  wrote in message 
news:6kmnmkF8n56nU1@mid.individual.net...
> I'm completing my CGT return in connection with the sale last year of my
> late Mother's property. I had always assumed that the cost of double
> glazing for this property, (which was done in the years 2000 to 2002),
> being a capital expenditure, would be allowable in reducing the tax
> payable. However, a recent call to HMRC produced the response that this
> is not the case, and that "improvements" only applied to such things as 
> the building of an extension or garage. When I replied that we had not 
> previously been allowed
> to offset this against rent received, the adviser said "you should have
> done", I was puzzled, as the relevant passages in the Taxation of Rents
> guide, IR150 state:
>
> Capital Expenses:
>
> (128) It is a general income tax principle that you can't deduct capital
> expenses in computing your taxable income.....
>
> and
>
> (145) Where a significant improvement arises from the change of
> materials, the whole cost is capital expenditure.......for example, if
> you replace single glazed softwood windows with double glazed PVC
> windows. the improvement element normally means that the entire cost is
> capital expenditure.
>
> Am I missing something here?

No.

IMHO the tax official that you spoke to was wrong.  AIUI the complete 
replacement of windows with DG units is an improvement which is deductible 
for CGT purposes.

(FWIW There is almost no chance that anyone will check your calculation!)

tim

tim..... wrote:
> 
> No.
> 
> IMHO the tax official that you spoke to was wrong.  AIUI the complete 
> replacement of windows with DG units is an improvement which is deductible 
> for CGT purposes.
> 
> (FWIW There is almost no chance that anyone will check your calculation!)

Really! that's interesting. Many thanks for the reply.

Mike

On Fri, 3 Oct 2008 16:19:09 +0100, "tim....."
 wrote:

>
>"Mike O'Sullivan"  wrote in message 
>news:6kmnmkF8n56nU1@mid.individual.net...
>> I'm completing my CGT return in connection with the sale last year of my
>> late Mother's property. I had always assumed that the cost of double
>> glazing for this property, (which was done in the years 2000 to 2002),
>> being a capital expenditure, would be allowable in reducing the tax
>> payable. However, a recent call to HMRC produced the response that this
>> is not the case, and that "improvements" only applied to such things as 
>> the building of an extension or garage. When I replied that we had not 
>> previously been allowed
>> to offset this against rent received, the adviser said "you should have
>> done", I was puzzled, as the relevant passages in the Taxation of Rents
>> guide, IR150 state:
>>
>> Capital Expenses:
>>
>> (128) It is a general income tax principle that you can't deduct capital
>> expenses in computing your taxable income.....
>>
>> and
>>
>> (145) Where a significant improvement arises from the change of
>> materials, the whole cost is capital expenditure.......for example, if
>> you replace single glazed softwood windows with double glazed PVC
>> windows. the improvement element normally means that the entire cost is
>> capital expenditure.
>>
>> Am I missing something here?
>
>No.
>
>IMHO the tax official that you spoke to was wrong.  AIUI the complete 
>replacement of windows with DG units is an improvement which is deductible 
>for CGT purposes.

Your honest opinion is noted but HMRC manuals state:

Property Income Manual 2020
"An example is double-glazing. In the past we took the view that
replacing single-glazed windows with double-glazed windows was an
improvement and therefore capital expenditure. But times have changed.
Building standards have improved and the types of replacement windows
available from retailers have changed. We now accept that replacing
single-glazed windows by double-glazed equivalents counts as allowable
expenditure on repairs."
http://www.hmrc.gov.uk/manuals/pimmanual/PIM2020.htm

Business Income Manual 46904
"Kate has the windows of her offices replaced. The old windows were
singled glazed. She just wants to replace the old units. Building
standards have improved and the types of replacement windows available
from retailers have changed. The replacement windows are
double-glazed. This shows the effect of changes in technology. At one
time replacing single-glazed windows with double-glazed windows was
regarded as an improvement and therefore capital expenditure. But
times have changed. Double-glazing is now standard and is the modern
equivalent. Replacing single-glazed windows by double-glazed
equivalents counts as allowable expenditure on repairs. "
http://www.hmrc.gov.uk/manuals/bimmanual/BIM46904.htm

--
Alan "Ferrit" Ferris

 ()'.'.'()
 ( (T) )
 ( ) . ( )
 (")_(")

"Alan Ferris"  wrote in message 
news:pgmce41ngd38b60oto5efadi94lii925gv@4ax.com...
> On Fri, 3 Oct 2008 16:19:09 +0100, "tim....."
>  wrote:
>
>>
>>"Mike O'Sullivan"  wrote in message
>>news:6kmnmkF8n56nU1@mid.individual.net...
>>> I'm completing my CGT return in connection with the sale last year of my
>>> late Mother's property. I had always assumed that the cost of double
>>> glazing for this property, (which was done in the years 2000 to 2002),
>>> being a capital expenditure, would be allowable in reducing the tax
>>> payable. However, a recent call to HMRC produced the response that this
>>> is not the case, and that "improvements" only applied to such things as
>>> the building of an extension or garage. When I replied that we had not
>>> previously been allowed
>>> to offset this against rent received, the adviser said "you should have
>>> done", I was puzzled, as the relevant passages in the Taxation of Rents
>>> guide, IR150 state:
>>>
>>> Capital Expenses:
>>>
>>> (128) It is a general income tax principle that you can't deduct capital
>>> expenses in computing your taxable income.....
>>>
>>> and
>>>
>>> (145) Where a significant improvement arises from the change of
>>> materials, the whole cost is capital expenditure.......for example, if
>>> you replace single glazed softwood windows with double glazed PVC
>>> windows. the improvement element normally means that the entire cost is
>>> capital expenditure.
>>>
>>> Am I missing something here?
>>
>>No.
>>
>>IMHO the tax official that you spoke to was wrong.  AIUI the complete
>>replacement of windows with DG units is an improvement which is deductible
>>for CGT purposes.
>
> Your honest opinion is noted but HMRC manuals state:
>
> Property Income Manual 2020
> "An example is double-glazing. In the past we took the view that
> replacing single-glazed windows with double-glazed windows was an
> improvement and therefore capital expenditure. But times have changed.
> Building standards have improved and the types of replacement windows
> available from retailers have changed. We now accept that replacing
> single-glazed windows by double-glazed equivalents counts as allowable
> expenditure on repairs."
> http://www.hmrc.gov.uk/manuals/pimmanual/PIM2020.htm

OK, but how does this work if you put the windows in at the time that they 
were a capital expense?

tim

"Alan Ferris"  wrote in message
news:pgmce41ngd38b60oto5efadi94lii925gv@4ax.com...
> On Fri, 3 Oct 2008 16:19:09 +0100, "tim....."
>  wrote:
>
>>
>>"Mike O'Sullivan"  wrote in message
>>news:6kmnmkF8n56nU1@mid.individual.net...
>>> I'm completing my CGT return in connection with the sale last year of my
>>> late Mother's property. I had always assumed that the cost of double
>>> glazing for this property, (which was done in the years 2000 to 2002),
>>> being a capital expenditure, would be allowable in reducing the tax
>>> payable. However, a recent call to HMRC produced the response that this
>>> is not the case, and that "improvements" only applied to such things as
>>> the building of an extension or garage. When I replied that we had not
>>> previously been allowed
>>> to offset this against rent received, the adviser said "you should have
>>> done", I was puzzled, as the relevant passages in the Taxation of Rents
>>> guide, IR150 state:
>>>
>>> Capital Expenses:
>>>
>>> (128) It is a general income tax principle that you can't deduct capital
>>> expenses in computing your taxable income.....
>>>
>>> and
>>>
>>> (145) Where a significant improvement arises from the change of
>>> materials, the whole cost is capital expenditure.......for example, if
>>> you replace single glazed softwood windows with double glazed PVC
>>> windows. the improvement element normally means that the entire cost is
>>> capital expenditure.
>>>
>>> Am I missing something here?
>>
>>No.
>>
>>IMHO the tax official that you spoke to was wrong.  AIUI the complete
>>replacement of windows with DG units is an improvement which is deductible
>>for CGT purposes.
>
> Your honest opinion is noted but HMRC manuals state:
>
> Property Income Manual 2020
> "An example is double-glazing. In the past we took the view that
> replacing single-glazed windows with double-glazed windows was an
> improvement and therefore capital expenditure. But times have changed.
> Building standards have improved and the types of replacement windows
> available from retailers have changed. We now accept that replacing
> single-glazed windows by double-glazed equivalents counts as allowable
> expenditure on repairs."
> http://www.hmrc.gov.uk/manuals/pimmanual/PIM2020.htm
>
> Business Income Manual 46904
> "Kate has the windows of her offices replaced. The old windows were
> singled glazed. She just wants to replace the old units. Building
> standards have improved and the types of replacement windows available
> from retailers have changed. The replacement windows are
> double-glazed. This shows the effect of changes in technology. At one
> time replacing single-glazed windows with double-glazed windows was
> regarded as an improvement and therefore capital expenditure. But
> times have changed. Double-glazing is now standard and is the modern
> equivalent. Replacing single-glazed windows by double-glazed
> equivalents counts as allowable expenditure on repairs. "
> http://www.hmrc.gov.uk/manuals/bimmanual/BIM46904.htm
>
> --
> Alan "Ferrit" Ferris

Interesting... but does eligibility as revenue expenditure necessarily
exclude treatment (in the alternative) as capital?

If I choose to capitalise my bambi stapler - even though expensing it would
be normal - I don't think that excludes a Cap Allowance claim.

And surely there's a point at which replacement of windows becomes
improvement?  Indeed, as technology moves forward apace, ISTM that there's
very little "replacement" which can actually be achieved like-for-like.


-- 
Martin

tim..... wrote:
> 
>> Property Income Manual 2020
>> "An example is double-glazing. In the past we took the view that
>> replacing single-glazed windows with double-glazed windows was an
>> improvement and therefore capital expenditure. But times have changed.
>> Building standards have improved and the types of replacement windows
>> available from retailers have changed. We now accept that replacing
>> single-glazed windows by double-glazed equivalents counts as allowable
>> expenditure on repairs."
>> http://www.hmrc.gov.uk/manuals/pimmanual/PIM2020.htm
> 
> OK, but how does this work if you put the windows in at the time that they 
> were a capital expense?

Yes, that is why I'm confused. Seems a Catch 22 situation, if, at the 
time of the improvement It's capital, and excluded from income tax 
relief, but by the time of the CHT liability it becomes a repair, and 
excluded here too.

On Fri, 3 Oct 2008 19:03:50 +0100, "tim....."
 wrote:

>
>"Alan Ferris"  wrote in message 
>news:pgmce41ngd38b60oto5efadi94lii925gv@4ax.com...
>> On Fri, 3 Oct 2008 16:19:09 +0100, "tim....."
>>  wrote:
>>
>>>
>>>"Mike O'Sullivan"  wrote in message
>>>news:6kmnmkF8n56nU1@mid.individual.net...
>>>> I'm completing my CGT return in connection with the sale last year of my
>>>> late Mother's property. I had always assumed that the cost of double
>>>> glazing for this property, (which was done in the years 2000 to 2002),
>>>> being a capital expenditure, would be allowable in reducing the tax
>>>> payable. However, a recent call to HMRC produced the response that this
>>>> is not the case, and that "improvements" only applied to such things as
>>>> the building of an extension or garage. When I replied that we had not
>>>> previously been allowed
>>>> to offset this against rent received, the adviser said "you should have
>>>> done", I was puzzled, as the relevant passages in the Taxation of Rents
>>>> guide, IR150 state:
>>>>
>>>> Capital Expenses:
>>>>
>>>> (128) It is a general income tax principle that you can't deduct capital
>>>> expenses in computing your taxable income.....
>>>>
>>>> and
>>>>
>>>> (145) Where a significant improvement arises from the change of
>>>> materials, the whole cost is capital expenditure.......for example, if
>>>> you replace single glazed softwood windows with double glazed PVC
>>>> windows. the improvement element normally means that the entire cost is
>>>> capital expenditure.
>>>>
>>>> Am I missing something here?
>>>
>>>No.
>>>
>>>IMHO the tax official that you spoke to was wrong.  AIUI the complete
>>>replacement of windows with DG units is an improvement which is deductible
>>>for CGT purposes.
>>
>> Your honest opinion is noted but HMRC manuals state:
>>
>> Property Income Manual 2020
>> "An example is double-glazing. In the past we took the view that
>> replacing single-glazed windows with double-glazed windows was an
>> improvement and therefore capital expenditure. But times have changed.
>> Building standards have improved and the types of replacement windows
>> available from retailers have changed. We now accept that replacing
>> single-glazed windows by double-glazed equivalents counts as allowable
>> expenditure on repairs."
>> http://www.hmrc.gov.uk/manuals/pimmanual/PIM2020.htm
>
>OK, but how does this work if you put the windows in at the time that they 
>were a capital expense?

Then you claim them as capital.  But you need to show when you
installed them if they investigate.

--
Alan "Ferrit" Ferris

 ()'.'.'()
 ( (T) )
 ( ) . ( )
 (")_(")

In article ,
	"tim....."  writes:
> 
> "Alan Ferris"  wrote in message 
> news:pgmce41ngd38b60oto5efadi94lii925gv@4ax.com...
>> On Fri, 3 Oct 2008 16:19:09 +0100, "tim....."
>>  wrote:
>>
>>>
>>>"Mike O'Sullivan"  wrote in message
>>>news:6kmnmkF8n56nU1@mid.individual.net...
>>>> I'm completing my CGT return in connection with the sale last year of my
>>>> late Mother's property. I had always assumed that the cost of double
>>>> glazing for this property, (which was done in the years 2000 to 2002),
>>>> being a capital expenditure, would be allowable in reducing the tax
>>>> payable. However, a recent call to HMRC produced the response that this
>>>> is not the case, and that "improvements" only applied to such things as
>>>> the building of an extension or garage. When I replied that we had not
>>>> previously been allowed
>>>> to offset this against rent received, the adviser said "you should have
>>>> done", I was puzzled, as the relevant passages in the Taxation of Rents
>>>> guide, IR150 state:
>>>>
>>>> Capital Expenses:
>>>>
>>>> (128) It is a general income tax principle that you can't deduct capital
>>>> expenses in computing your taxable income.....
>>>>
>>>> and
>>>>
>>>> (145) Where a significant improvement arises from the change of
>>>> materials, the whole cost is capital expenditure.......for example, if
>>>> you replace single glazed softwood windows with double glazed PVC
>>>> windows. the improvement element normally means that the entire cost is
>>>> capital expenditure.
>>>>
>>>> Am I missing something here?
>>>
>>>No.
>>>
>>>IMHO the tax official that you spoke to was wrong.  AIUI the complete
>>>replacement of windows with DG units is an improvement which is deductible
>>>for CGT purposes.
>>
>> Your honest opinion is noted but HMRC manuals state:
>>
>> Property Income Manual 2020
>> "An example is double-glazing. In the past we took the view that
>> replacing single-glazed windows with double-glazed windows was an
>> improvement and therefore capital expenditure. But times have changed.
>> Building standards have improved and the types of replacement windows
>> available from retailers have changed. We now accept that replacing
>> single-glazed windows by double-glazed equivalents counts as allowable
>> expenditure on repairs."
>> http://www.hmrc.gov.uk/manuals/pimmanual/PIM2020.htm
> 
> OK, but how does this work if you put the windows in at the time that they 
> were a capital expense?

... and when was the cutover (when did that paragraph appear)?

The building regs requirement for improved insulation (in Part L)
including windows, which is what I presume that is referring to,
came in in April 2002.

-- 
Andrew Gabriel
[email address is not usable -- followup in the newsgroup]