Capital Gains on house sale

Coolhandluke

Appreciating all your comments and advice. Were I to live in it for a year and make it my main residence would that make any difference? Although I'm guessing not. Def not straight forward. 

Jeremy535897

purdyoaten2 said:

Jeremy535897 said:

Unfortunately it is very debatable as to whether any of these count as improvements for this purpose. Normally you are looking at something like a conservatory, or an extension. I welcome any other posters' comments.

The guidance on this is simply awful and always has been. For example, I would always claim the cost of an entirely new kitchen as this would clearly add value but would disregard the simple replacement of units. But, if the kitchen was replaced twenty years ago it now needs replaced again and, accordingly, has it added value? The heating system is a possibility if there was none in place originally (possible 33 years ago?) Even more contentious could be a new bathroom e.g. total upgrade from old cast iron bath to modern alternative - but starting to struggle now! 

Time jimmo contributed I think 🤔 

I think you also have to contend with this:
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim35455

You can now claim a revenue deduction for things like replacing double glazing with single glazing, because that is what the current standard now is. The corollary is that it isn't an improvement. Nor is replacing one kitchen with another, nor one bathroom with another. In addition, such things often aren't really reflected in the value of the property, which prevents a claim. 

[Deleted User]

Jeremy535897 said:

purdyoaten2 said:

Jeremy535897 said:

Unfortunately it is very debatable as to whether any of these count as improvements for this purpose. Normally you are looking at something like a conservatory, or an extension. I welcome any other posters' comments.

The guidance on this is simply awful and always has been. For example, I would always claim the cost of an entirely new kitchen as this would clearly add value but would disregard the simple replacement of units. But, if the kitchen was replaced twenty years ago it now needs replaced again and, accordingly, has it added value? The heating system is a possibility if there was none in place originally (possible 33 years ago?) Even more contentious could be a new bathroom e.g. total upgrade from old cast iron bath to modern alternative - but starting to struggle now! 

Time jimmo contributed I think 🤔 

I think you also have to contend with this:
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim35455

You can now claim a revenue deduction for things like replacing double glazing with single glazing, because that is what the current standard now is. The corollary is that it isn't an improvement. Nor is replacing one kitchen with another, nor one bathroom with another. In addition, such things often aren't really reflected in the value of the property, which prevents a claim. 

Tax simplification at its best. (I imagine that you meant replacing single glazing with double by the way)

Jeremy535897

purdyoaten2 said:

Jeremy535897 said:

purdyoaten2 said:

Jeremy535897 said:

Unfortunately it is very debatable as to whether any of these count as improvements for this purpose. Normally you are looking at something like a conservatory, or an extension. I welcome any other posters' comments.

The guidance on this is simply awful and always has been. For example, I would always claim the cost of an entirely new kitchen as this would clearly add value but would disregard the simple replacement of units. But, if the kitchen was replaced twenty years ago it now needs replaced again and, accordingly, has it added value? The heating system is a possibility if there was none in place originally (possible 33 years ago?) Even more contentious could be a new bathroom e.g. total upgrade from old cast iron bath to modern alternative - but starting to struggle now! 

Time jimmo contributed I think 🤔 

I think you also have to contend with this:
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim35455

You can now claim a revenue deduction for things like replacing double glazing with single glazing, because that is what the current standard now is. The corollary is that it isn't an improvement. Nor is replacing one kitchen with another, nor one bathroom with another. In addition, such things often aren't really reflected in the value of the property, which prevents a claim. 

Tax simplification at its best. (I imagine that you meant replacing single glazing with double by the way)

Oops yes. There is a direct reference to this item here:
https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2030

oldbikebloke

the better place to took for HMRC thoughts on at capital "improvements" is their view of whether a cost is a repair (revenue expense) rather than a capital cost

Kitchen - by "new" I assume you mean refitted (replaced) what was there with "new" units rather than installed a kitchen that did not exist previously. If "refitted" then on average classed as not capital BIM46911 - Business Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)

Bathroom - same principle 

Double glazing - now regarded as not capital: "new" technology is no longer seen as an improvement and is simply what is used for the job. . Double glazing is now "the norm"  
BIM46925 - Business Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)
PIM2030 - Property Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)

heating system - like for like capacity = not capital. same principle as kitchen above