End of wear and tear

End of wear and tear

In the 2015 Summer budget George Osborne declared that the Wear and Tear deduction would be scrapped from April 2016.  HMRC put forward an alternative, which is ironically virtually identical to one it pushed the government to abolish in 2013.  The proposal is for a renewals allowance which will allow landlords a deduction for the cost of replacing furnishings and equipment, e.g. beds, curtains, crockery, etc., but just like the old renewals allowance there is a catch.

The new deduction will only be allowed up to the value of a like-for-like replacement.  For example, you replace a TV in a let property.  Instead of buying a basic HD model for say £500, you buy an ultra HD TV for £1,000, HMRC would only allow a tax deduction for £500.

Tip – Because the W&T deduction will work out the same for the period up to April 2016 whether or not you purchase any furnishings etc. you should delay buying these until after 5 April 2016.  That way you wont lose any allowance.

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