What tax deductions can L claim (e.g. wear and tear)?

[kensden]

I am pretty new to being a landlord, I have let my one and only residential property (in my wife's and my name). Im just about to complete my first tax return as one. Can anyone point me to the allowances that I can claim? I am paricularly interested in ?wear and tear allowance on my furnture that is in the flat?

Thanks

[Tax Accountant]

I am pretty new to being a landlord, I have let my one and only residential property (in my wife's and my name). Im just about to complete my first tax return as one. Can anyone point me to the allowances that I can claim? I am paricularly interested in ?wear and tear allowance on my furnture that is in the flat?

Thanks

Please refer to H M Revenue & Custom's Property Income Manual at the link below to give you full details of allowable expenses:

http://www.hmrc.gov.uk/manuals/pimmanual/PIM2000.htm

For Wear & Tear allowances for furnishings, refer to:
http://www.hmrc.gov.uk/manuals/pimmanual/PIM3200.htm

Basically, Wear & Tear Allowance is based on ''Net Rents'' which is Gross rents less any of tenant's expenses which you have agreed to pay such as utility bills, council tax etc. The allowance is 10% x Net Rents (as defined above) of each particular tax year. This allowance is claimed every year regardless of the original cost of furnishings and whether they are replaced in later years.

It is important to remember that if you claim Wear & Tear Allowance, you are not entitled to claim for the original cost of furnishings or the Renewals Allowance for the replacement cost of the furnishings.

However, there are certain capital items, such as a boiler or kitchen fittings for which you are not able to claim for the original cost, but are able to claim the cost of replacement expense under Renewals.

Therefore, it is important to distinguish between the renewal of furnishings and renewal of other items.

I hope this helps. If you have any specific queries, feel free to write again.

Ramnik

[kensden]

Thanks for this, can I digest it and I may need to post again?

[kensden]

I've just checked my outgoings. can you give this naive landlord your thoughts as to whether they are allowable?

Letting Agent Fees
British Gas Maintenance Contract - Electrics, Plumbing, GCH, etc
Landlord Insurance
Moving costs - furnishing the flat
Redecorating the flat
Replacing fridge wich died

Would you go for renewal allowances or the 10% wear & tear (I'd have to scrub the replacement fridge)?

[Tax Accountant]

I've just checked my outgoings. can you give this naive landlord your thoughts as to whether they are allowable?

Letting Agent Fees
British Gas Maintenance Contract - Electrics, Plumbing, GCH, etc
Landlord Insurance
Moving costs - furnishing the flat
Redecorating the flat
Replacing fridge wich died

Would you go for renewal allowances or the 10% wear & tear (I'd have to scrub the replacement fridge)?

''Moving costs - furnishing the flat'' appears not allowable.

''Replacing the fridge which died'' would normally be allowable if you adopt the renewals basis.

I would normally prefer the 10% wear & tear basis as this gives continuous deductions every year regardless of whether you replace the furnishings or not. Exact answer depends on your particular facts.

Ramnik

[kensden]

Ramnik,

Cheers.

Kenny

[Tax Accountant]

Ramnik,

Cheers.

Kenny

You are welcome,

Perhaps you should consider engaging an accountant. He shouldn't cost more than approx £250.

Ramnik