Replacement of furnishings
From April 2016, all landlords of residential dwelling houses are allowed to deduct the costs they actually incur on replacing furnishings, appliances and kitchenware in the property. This relief for the cost of replacing furnishings is available to furnished and unfurnished properties too. Before this change, it was possible to claim wear and tear allowance for furnished properties. But there was no tax relief for the replacement of furnishings in partly furnished or unfurnished properties.
Examples of eligible capital expenditure are:
- furniture
- furnishings
- appliances (including white goods)
- kitchenware
but would exclude items which are fixtures.
However, if there is an improvement on an old item, the relief is restricted to the cost of an equivalent item. This deduction will not be available for furnished holiday lettings, or where rent-a-room relief is claimed.
The withdrawal of Wear and tear allowance
From April 2016, the wear and tear allowance which was available to landlords of fully furnished properties has been abolished.
If you live in Croydon, Kent and London we, at Adiva Accountants in Croydon, can help you understand how the changes in reliefs can impact your rental income.