10% wear & tear

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    10% wear & tear

    I don't actually understand this part of the form. Is it just for when replacing items, such as microwave, washing machine etc? So if I have not needed to replace anything, I do not need to put a figure in?

    I assume you cannot claim for replacement windows or new bathroom floor?

    Happily I am moving back to my flat very soon as last tenant let me down last minute and I have been feeling the need to move back for a long time now as I've never been happy letting it out, but financial problems meant I had to, although I think I will look down the 'flatmate' route in future.

    When you have a fully furnished (exact definition not given) BTL then you have the option to either
    1) Offset the actual cost fo all furniture etc against income for tax purposes or
    2) Simply assume that 10% of the rent goes to replacing furniture etc as required. But then you can't offset the actual costs as well.

    The definition I use for deciding whether somewhere is adequately furniched to qualify is whether the tenant coudl get everything else they need to live there home on the bus with them. I know other landlords have slightly more sparsley furnished properties claiming 10% w&t.

    You choose forever for a property and cannot decide to use the 10% w&t allowance one year but not others.
    Different properties can be designated in different ways so some use w&t and some don't - I'd never suggest that all new furniture is assumed to be for the property where you don't claim the 10% w&t :-)
    Where there are joint owners its even possible that one uses the w&t allowance but the other uses actual costs.

    Its then an issue of what counts as furniture. One definition I like is "if I shook the house it is the things that would rattle" but then there are issues over things like - free standing fridge (furniture) v built in fridge (not furniture)



      Sort of Billy Goats.

      Your point (1) - you can offset the costs of replacing or repairing furniture carpets etc. against income.

      OP. It's a flat rate 10% of your income is non-taxable in exchange for not being able to obtain a tax deduction for the repairs. So you should have been putting a number in that box every year.

      How many years have you been letting it?

      As for the windows/bathroom floor, some dates needed:

      1. When did you start letting it
      2. When did you replace them
      3. When did you stop letting it.


        10% Wear & Tear

        I began letting in November 2009. I ceased letting in May 2011.

        First window replaced in October 2010 and second in January 2011.

        The whole 10% wear and tear is still confusing me, I do not understand the first reply at all! It is fully furnished and has a free standing fridge freezer, everything is there that you need to live there happily.

        I put nothing in this particular box for my first Tax Return, so perhaps I should not bother this time? Although anything to reduce the amount of tax to pay is good!


          Sorry my reply was garbled - let me try again.

          When you started renting the house out furnished you had a choice of ways fo dealing with the cost of replacing furniture for tax purposes. Either
          1) add up the real cost of replacing furniture
          2) assume that 10% of the rent was to cover wear and tear on furniture etc.
          This decision is for that house effectively forever. No changing your mind later. or swapping anc changing between methods.

          When it comes to the tax return, if you chose option 1) then you allow for the actual cost of replacing/repairing furniture in the box labelled something like "repairs and maintennace" and you put "0" in the 10% wear and tear box you refer to.
          If you went for option 2) then you do not include the cost of repairs/replacement of furniture in the "reapeairs and maintenance" box. Instaed you include 10% of the rent received for that proeprty in the "10% wear and tear box".

          Its bascially saying woudl you rather allow fo rthe actual cost of replacing furiniture or just assume its 10% of the rent received when working out profit for tax purposes.

          If you put nothing in this box last time and included anything for furniture etc then you effectively chose option 1 and must therefore do the same again every year.

          Hope that is a bit clearer.



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