A replacement involves substituting an entire asset or a significant part of it (e.g., replacing the roof or installing a new heating system).
- Capital Expenditure: Replacements are considered capital expenses, not deductible against rental income, but may qualify for capital allowances or affect Capital Gains Tax (CGT) when sold.
- Fixtures and Fittings: Replacing items like furniture may qualify for 12.5% wear and tear allowance over 8 years.
