What are the changes to landlords' wear and tear allowance?
Prior to April 2016, if you were letting out a fully furnished property, you used to be able to claim for wear and tear of furnishings, such as cookers, carpets, beds and televisions. The allowance meant that you could claim 10% of the net annual rent each year. This allowance was replaced with ‘Replacement of domestic items relief’, which applies to all rented properties, not just furnished homes. There are certain conditions, but on the whole, it means that, as a landlord, you can claim back anything that you spend on replacing a 'domestic item’, not its initial purchase. Additionally, it’s worth emphasising that you can't claim tax relief on the cost of adding a kitchen for the first time or furnishing the property from scratch.
You may consider a part exchange or complete exchange of a broken item, just keep in mind that the new item needs to be of broadly the same standard and quality of the item it will replace
What are some key allowable expenses all landlords should keep in mind?
Whether you’re new to the investment scene or an expert landlord, the following expenses are some of the key claims that can make a real difference to your tax return. So, don’t forget that you can claim back for expenses such as the cost of petrol for travelling between your rental properties, or for phone calls or texts that were sent in connection with a rental property. It is also possible to claim back the cost of subscriptions to property investment magazines, plus money spent on advertising the property, as well as legal and accountancy fees connected to the buy-to-let.
Get in touch with your local branch if you have any further questions.