Reform of the wear and tear allowance - Are you affected?

7 years, 4 months ago by Oliver Atkinson

Reform of the wear and tear allowance - Are you affected?

Reform of the wear and tear allowance - Are you affected?

With wear and tear allowance, landlords of fully furnished properties could deduct 10% of net rent from their profits to cover wear and tear. This deduction could be used whether they replaced any furnishings, fixtures and fittings or repair the property or not.

But from April 2016, the wear and tear allowance has been replaced with a relief that enables all landlords of residential properties to deduct the costs they actually incurred on replacing furniture and fixtures and fittings in the rented property.

The relief will be available 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.