The wear and tear allowance has been replaced by a relief that enables landlords to deduct actual costs incurred on replacing furnishings in a property.
We briefly go over the changes and how landlords are likely to be affected.
The 10% annual allowance on rental income was replaced in April 2016 with a relief that allows landlords of residential property to deduct actual costs incurred on furnishings in the tax year.
The relief only applies to the replacement of furnishings in a property. The initial cost of furnishing is exempt from the relief.
Landlords of residential houses no matter the level of furnishing will be affected by the change.
The new relief will not apply to furnished holiday letting businesses or commercial properties due to them getting capital allowances.
Under the relief, landlords will be able to claim a deduction for the cost of replacing furnishings including appliances and kitchenware for use in their property.
They can claim cost on:
The costs of replacing fixed furnishings cannot be claimed as under the new relief as they are considered repairs to property.
If there is a specific area you would like to know about on wear and tear changes, contact us by completing the form on our website.
Alternatively you can call us on 020 8977 0905 (Hampton Wick Office) or 01932 855644 (Weybridge Office) to speak to an adviser.