Personal tax - Allowable property expenditure (PLTX AQ2016)

Oniyama100 Registered Posts: 7 New contributor 🐸
Hi all, I am completing revision for Personal tax exam (AQ2016) and the rules regarding allowable expenditure against property income are truly confusing.

Can anyone help with the logic behind this practice assessment question (AAT practice assessment 1):

'Yellow Gardens was let from 7th January 2021 for the remainder of the tax year at £550 per month. Rent was paid the same date each month starting 7 January 2021. Sam paid £2,850 in August 2020 to replace the single glazed windows with double glazed windows'

The answer is:
Taxable rent: £1,650
Allowable expenses: £2,850

However, I answered '£0' for allowable expenses. The logic being, this is a replacement, but since adding double glazing would increase the value of the property, it is a capital expense and therefore NOT allowable. Other information in the course material also leans towards £0 answer e.g. it is not bringing the property back to original state, because replacing single glazed with double glazed is an improvement, by most peoples' standards.

Can anyone explain why the double glazing is an allowable expense, when ADDING double glazing would seem to be a clear improvement/upgrade, rather than ongoing decoration or domestic replacement?

Kindest regards


  • douglasstroud
    douglasstroud Registered Posts: 288 Dedicated contributor 🌟 🐵 🌟
    At one time double glazing was seen as an improvement but over time it became the industry norm, this meant that replacing with double glazing was no longer an improvement and became allowable expenditure as a like for like replacement.
    Does your study material not mention this?
    Windows were usually used as an example.
  • Oniyama100
    Oniyama100 Registered Posts: 7 New contributor 🐸
    Hi @douglasstroud
    Ah thanks so much for that, I appreciate your response and I will keep that in mind.
    No, my Osborn text does not mention this distinction. But, it does make sense, as any property on the market nowadays would just be expected to have double glazing.
    Thanks again, and very best.
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