I purchased a flat in 2012, which was one of 15 where I paid approximately £95,000 for the flat plus £60,00 for major refurbishment works. Subsequently, the flat roof of the whole development needed replacing at a cost of approximately £300,000, split between the 15 flats, my share being close to £20,000! In my particular case, unusually it would be more tax-efficient to regard this as capital expenditure since I have virtually no other income and the flat has made a substantial (£120,000 plus) gain. So, I would prefer to reduce any future large CGT bill, especially as the government is now considering aligning CGT with income tax. Do you think, in my case, this can be treated as a capital expense? 

Arthur Weller replies:  

When a whole roof is replaced, as in your case, it is a borderline matter whether this should be considered capital or revenue expenditure. See HMRC’s Business Income Manual at BIM35400 https://tinyurl.com/bim35400  (from page BIM35430 onwards), in particular BIM35467. There you can see reference to a 'similar' case, Bullcroft Main Collieries, where the High Court decided that the expenditure was capital.