December 2011 saw the Extra – statutory concession B47 (Renewals allowance) abolished, however it still remains unclear whether this change is only related to furnished properties
Until April 2013…
Any Landlord letting a property qualifying as ‘furnished’ had two options:
- Claim a deduction against rental income for the actual cost of replacing furniture and appliances BUT not for the initial cost of the purchasing the goods.
- Making a claim for the 10% wear and tear allowance against rental income.
NOW…..
HMRC published the following new guidelines in May 2014, outlining how expenditure is dealt with, dependant on which of the following categories it falls under:
- Plant: Items that are relatively large and durable.
- Tools of Trade: for example crockery and cutlery, bed linen and cushions but not carpets, sofas, beds and free standing cookers and fridges.
- Repairs: of the asset in its entirety.
Time to furnish your Buy to Let?
Landlords may now be inclined to furnish their property, simply to qualify for the 10% allowance!
