UK Wear & Tear Allowance

To become Replacement Furniture Relief in 2016/17

The Government this week issued a Consultation Document to explain their proposals to introduce a Replacement Furniture Relief from April 2016, for UK landlords.

The new relief would be available to all types of lettings (except Furnished Holiday Lettings, which are already covered by the Capital Allowances regime) and would reflect actual expenditure on items such as:

  • movable furniture or furnishings, eg. chairs, sofas, tables
  • televisions
  • fridges and freezers
  • carpets and floor-coverings
  • curtains
  • linen
  • crockery or cutlery
  • beds and other furniture

Currently, the 10% Wear & Tear Allowance is available only for furnished lettings and is calculated based on the level of rental income; it bears no relation to actual expenditure incurred by the landlord. The new relief is to be based on actual expenditure incurred on such items.

There will certainly be winners and losers as a result of this new relief. Those landlords of largely unfurnished properties, who perhaps install washing machines, dishwashers etc in their properties will now be able to get tax relief on the replacement products – but not on the initial expenditure. Those landlords of furnished properties who do not replace the furnishings, but have hitherto enjoyed an allowance for nil expenditure, will no longer be able to claim tax relief unless they actual pay out for replacement goods. No tax relief is due on the initial expenditure.

Responses to this consultation can be submitted until 9 October 2015.