Following on from my earlier post, we now have details of the proposed changes to the wear and tear allowance for landlords.
It is proposed that the current 10% flat deduction for properties that are let furnished will be replaced with a new furnishings tax relief.
The new rules will mean that instead of only being claimed by landlords that let fully furnished properties, the new allowance will be claimable by all residential landlords that have allowable expenditure.
Allowable expenditure includes: furniture, furnishings, household appliances and kitchenware.
The new calculation of the allowance is as below:
Replacement Cost* PLUS incidental disposal/acquisition costs LESS any amount received on disposal
(* If the replacement is an improvement then replacement costs are limited to the cost of an equivalent item. Reasonable technological advances are however allowed.)
The new rules are proposed to apply from 6th April 2016.
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