Rental Accounts – Wear and Tear Allowances

Wear and tear allowance

If the property is let furnished, the landlord is able to claim a wear and tear allowance. This is 10% of the ‘net’ rent and covers plant and machinery that a landlord would normally provide in a furnished accommodation, such as furniture, fridges, carpets and curtains. ‘Net’ rent is the total rent for the year, less any expenses paid by the landlord that would normally be borne by the tenant, for example utility bills.

 

Changes to wear and tear allowance – 1 April 2016 for corporation tax payers and 6 April 2016 for income tax payers

The wear and tear allowance for fully furnished properties will be replaced with a relief that enables all landlords of residential dwelling houses to deduct the costs they actually incur on replacing furnishings, appliances and kitchenware in the property. The relief given will be for the cost of a like-for-like, or nearest modern equivalent, replacement asset, plus any costs incurred in disposing of, or less any proceeds received for, the asset being replaced.

CONTACT AGA ACCOUNTANTS IF YOU REQUIRE HELP WITH YOUR TAX RETURN.