Replacement Furniture Relief for UK Rental Properties – The Replacement for the Wear and Tear Deduction

HM Revenue has issued draft legislation confirming Replacement Furniture Relief will replace the 10% wear and tear allowance for furnished rental properties located in the UK from the 6th of April 2016.

More specifically, from the start of the next UK tax year for UK purposes tax relief will be given against rental income for:

  • The cost of the replacement item
  • Less the cost of any element of improvement (beyond the nearest modern equivalent)
  • Less any proceeds of sale of the old item
  • Plus any costs of disposing of the old item

Relief will be given for “domestic items”, which will include:

  • Moveable furniture
  • Furnishings such as carpets, curtains and linen
  • Household appliances such as fridges and freezers
  • Kitchenware such as crockery and cutlery
  • Televisions

Expenditure must relate solely to items that are for the use of the tenant within the let property.

Expenditure on fixed items such as baths or boilers will continue to attract tax relief, being a repair to the property.