Ask the tax expert: Wear and tear

Mon 08 Feb 2016

Jo White
Tax Consultant, Spofforths 

Question:

I understand the wear and tear allowance is being removed in April 2016 but I am confused about the new tax relief. Can you give me examples of items which are, and will continue to be, treated as repairs?

Answer:

You are correct. From April 2016 the 10% wear and tear allowance available to landlords letting furnished residential properties will be removed and replaced by an ability to claim for the costs of replacing items used in the properties instead. This will also apply to un-furnished properties. To clarify, the rules associated with providing furniture etc. for furnished holiday lets are different and remain unchanged.

Under the new replacement furniture relief, landlords will be able to claim a deduction for the capital cost of replacing furniture, furnishings, appliances and kitchenware in the house which has been provided for the tenant’s use, including:

• movable furniture or furnishings, such as beds or suites

• televisions

• fridges and freezers

• carpets and floor-coverings

• curtains

• linen

• crockery or cutlery

• beds and other furniture

The initial cost of these items in a property will not be deductible, only the replacement.

Integral fixtures are not normally removed by the owner if the property was sold, so the replacement cost of these is, and will continue to be, a deductible expense as a repair to the property itself, providing the replacement is ‘like for like’. Fixtures under this category include items such as:

• baths

• washbasins

• toilets

• boilers

• fitted kitchen units

Understanding the changes from the wear and tear allowance to the new tax relief can be confusing. Spofforths can provide expert advice and guidance on any queries regarding the changes, to ensure that you have a full understanding of them.