10% Wear & Tear allowance

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    10% Wear & Tear allowance

    Hello, first post here and hopefully someone can help me out.

    I've just read some articles relating to the wear and tear allowance for fully furnished rental properties.
    Firstly, these are properties that I have owned for a number of years.

    It is my understanding that since April 2013 the replacement relief no longer applies and the only option is the 10% wear and tear allowance meaning that I can no longer replace carpets, curtains, crockery, washing machines, fridges etc and claim for the full amount that they actually cost but now must claim 10% of the gross annual rent. I can still claim for the cost of repairs though in addition to the 10% wear and tear.

    Can anyone tell me how this "new" rule affect a limited company that owns and leases rental properties? Are they still entitled to full relief for replacement carpets, washing machines, fridges etc (like for like) as and when they need replaced? On the basis that these expenses are wholly and exclusively related to the running of the company?

    #2
    The same rules apply to companies.

    Repairs have always been deductible in addition to the 10% W&T Allowance.

    HMRC's view on "trade tools" in section 68 ITTOIA 2005/CTA 2009 is that only small tools can qualify. IHMO, this is wrong - firstly, the legislation does mention the word "small" and, secondly, much larger items have qualified in the past.

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