Further to the announcement in the Summer budget that the wear and tear allowance for furnished lettings would be abolished, HM Revenue & Customs have now published a consultation document which outlines the proposal to replace wear and tear allowance with a relief that enables landlords to deduct the actual cost of replacing furnishings.
The new allowance would be available to landlords of furnished, part furnished and unfurnished lettings and will cover the capital cost of replacing items used by the tenants such as beds, fridges and freezers, carpets and floor coverings, televisions, linen and crockery. The relief will apply from 6 April 2016.
These changes are not applicable to those with furnished holiday lettings or commercial properties lettings. The current capital allowances regime will still apply in these cases.
For more information please contact Green & Co.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
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