CGT calculation

silvercar

I think there are a lot of grey areas eg capital improvement of a bathroom. If you add a shower, that was never there before, that could be classed as an improvement. Some may argue it depends on whether the shower is now a stand alone unit or an over bath type. Clearly the former is adding something that wasn’t there before, so is an improvement. An over bath shower arrangement could be thought of as a change in the plumbing arrangements and not really capital or an improvement as it adds something to the bathroom that wasn’t there before. 

Cobbler_tone

I've sold 5 properties and followed the exact same approach and never had a problem. Either the HMRC are REALLY bad at applying their rules, or after (in two cases) 15 years+, they are going to suddenly realise I owe them some money?

My most recent example. Bought a property with a wrecked bathroom...put a new one in with a shower cubicle, increasing the value. Then years later a tenant wrecked the old basic kitchen. Put an upgraded one in, with built in appliances, increasing the value but more so the saleability. Both were listed as capital improvements.
The tenant also wrecked most of the rest of the house last year, which needed plastering, decorating and new carpets. This was revenue expenditure I put on my SA to offset the liability on rental income.

Here is the actual CGT submission screen, which gives a handy description. You are in the world of debating the word 'luxury' from an end user perspective. As I have sold 5 properties without an issue, as I said either the HRMC don't challenge or they agree with my assessment. Maybe they will read this and change it if it causes confusion for the end user:

Bookworm105

your bottom line remains HMRC has decided not to challenge you.
Appears they have chosen not to question your "luxury" upgrade probably because it would not be cost effective for them to do so. Still does not make what you say correct or instructional for other people on how to be legal. 

As with much on the tax forms, the "guidance" is dumbed down and as you quote, the ability of people to interpret "improvement" rather than "replacement" is sadly not within the ability of most people.

Does not make your experience either "correct", just "lucky". 
Nor is your apparent cavalier attitude to not claiming costs as repairs against rental profit when by your own admission you were repairing "wrecked" stuff.

Self assessment is about teaching yourself what you need to know by reading detailed guidance, not rely on a few words on the face of the form (or employ an accountant who already knows).

Cobbler_tone

Bookworm105 said:

your bottom line remains HMRC has decided not to challenge you.
Appears they have chosen not to question your "luxury" upgrade probably because it would not be cost effective for them to do so. Still does not make what you say correct or instructional for other people on how to be legal. 

As with much on the tax forms, the "guidance" is dumbed down and as you quote, the ability of people to interpret "improvement" rather than "replacement" is sadly not within the ability of most people.

Does not make your experience either "correct", just "lucky". 
Nor is your apparent cavalier attitude to not claiming costs as repairs against rental profit when by your own admission you were repairing "wrecked" stuff.

Self assessment is about teaching yourself what you need to know by reading detailed guidance, not rely on a few words on the face of the form (or employ an accountant who already knows).

The "dumbed down" guidance, is the actual information for the end user. An end user is not expected to become an 'expert' and read and digest the detailed laws, that would be crazy.
So we all work on implied experience and interpretation of the information that is provided to us in any walk of life.
If you are implying that I rolled the dice 5 times and never had an issue, then the system truly is broken, or I have been ridiculously lucky, or I haven't actually stepped outside of the rules as they are designed. I always assume the most logical answer, it is normally the right one and I have never won the lottery.

As to what anyone else does, that is down to them. Anyway, all healthy debate.