Furniture and furnishings -10% rule

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  • Furniture and furnishings -10% rule

    For taxation puposes, claiming an allowance of 10% of rent for wear and tear on F & F is probably more convenient for most people than claiming cost of replacements.However we find that most tenants bring along at least some furniture and furnishings; not carpets and curtains, but items of furniture and accessories like cups and cutlery. We then have to take out our own equipment and sometimes end up with a storage problem.
    Of course it's understandable that tenants may often be in this position and that they would be unlikely to have anywhere else to store their possessions. However, at what point does the landlord have a potential taxation problem due to the fact that although he/she initially offered fully furnished accommodation, it ended up being less than this?

  • #2
    Suggest you post this on the Tax Questions forum.

    Comment


    • #3
      Mr Woof
      Thank you - I considered that; but I'd suggest that the question is equally appropriate for the rental property forum.
      John

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      • #4
        Originally posted by johnjw
        However, at what point does the landlord have a potential taxation problem due to the fact that although he/she initially offered fully furnished accommodation, it ended up being less than this?
        At the point that you feel it is resulting in you paying greater tax. Sorry, but this is a kind of "how long is a piece of string" question....it is entirely dependant upon several issues:

        - How often it happens.
        - How much furniture is left in the property each time.
        - How much furniture has to be replaced each time.
        - How much storage is required each time, and how much this costs.

        Therefore it is not only an answer specific to each landlord, but specific to in fact each tenancy....so if you are looking for an actual answer, I'm sorry but it is impossible to give a generic answer. However, it is certainly an interesting point you have raised there! Any other opinions?
        Any posts by myself are my opinion ONLY. They should never be taken as correct or factual without confirmation from a legal professional. All information is given without prejudice or liability.

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        • #5
          The definition of an unfurnished property funnily enough is the same as that of an empty council house. Ie no floor coverings, curtains or white goods.

          Removing some items of furniture would not in my opinion make it an unfurnished property.

          If this is often an issue, have you considered renting the property unfurnished?
          For the avoidance of doubt, I am not a solicitor nor a specialist. I have simply spent many years in the business and am expressing my opinions. I would urge caution to any individual using these forums as a sole basis for decision without first speaking to a solicitor.

          Comment


          • #6
            Furnished/unfurnished/part-furnished?

            Originally posted by mjpl
            The definition of an unfurnished property funnily enough is the same as that of an empty council house. Ie no floor coverings, curtains or white goods.

            Removing some items of furniture would not in my opinion make it an unfurnished property.
            I rent out my properties with all floor coverings, all curtains, some white goods and nothing else; ie "part-furnished". My accountant signs off my accounts each year including the for wear and tear allowance of 10% of rents received.

            I don't know whether that answers the original question satisfactorily, or whether someone is going to jump in and tell me my accountant is doing it wrong!

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            • #7
              Personally, I don't think it matters.
              For the avoidance of doubt, I am not a solicitor nor a specialist. I have simply spent many years in the business and am expressing my opinions. I would urge caution to any individual using these forums as a sole basis for decision without first speaking to a solicitor.

              Comment


              • #8
                Furniture and furnishings - 10% rule

                Thanks everyone for replies. The question was prompted by an article I read recently but I've now looked at the IR web site. Search on this topic leads to PIM3200. Furniture and furnishings covers everything from cookers - ( I'd have thought this would have come under "fixtures and fittings") - to crockery and cutlery. The Revenue article says: "If the accommodation isn't furnished, or only partly furnished, the 10% wear and tear allowance isn't due"
                However, helpfully, the article also says "Title to the 10% deduction does not depend on provision of each and every item in the list"
                John

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                • #9
                  Originally posted by johnjw
                  PIM3200.... ...says: "If the accommodation isn't furnished, or only partly furnished, the 10% wear and tear allowance isn't due"
                  Hmm. Brilliant. Someone remind me what the hell I'm paying my accountant for?

                  Comment


                  • #10
                    To furnish or not to furnish ...

                    The other thing that folk seem to forget about, as well as the 10% for tax, is that a furnished property will tend to rent much quicker than a non furnished property.

                    We run our own letting agency, and the ones that are furnished certainly go quicker than another of the others - this may be a Leeds thing, but im sure its the same throughout the uk, as people tent to be more transient due to work, divorce, etc etc.

                    We have since started providing furniture packages for the buy to let landlords, and the prices are nice and low at £2,500 and the standard is very high quality - further details are available at www.furniture-packages.co.uk

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                    • #11
                      Nice plug there

                      But what you obviously forget is that yes while furnished properties tend to go quicker, tenants in unfurnished properties tend to stay a whole lot longer, and so less total vacant period.
                      Any posts by myself are my opinion ONLY. They should never be taken as correct or factual without confirmation from a legal professional. All information is given without prejudice or liability.

                      Comment

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