9.4 Repairs, replacements and other alterations to the property
9.4.1 What are the basic principles?
The key issue for landlords undertaking work on the property is whether the costs incurred can be deducted against rental profits. The following is a summary of the position:
•If the work can be classed as a repair, the costs are allowable as income expenditure.
•If the work constitutes a replacement of a major item, or a radical alteration to the property, the costs are capital. In general, such costs are not allowable against rental profits. A deduction may be available as enhancement expenditure when the property is sold or otherwise disposed of.