Tax query on furnished letting (re abolition of wear and tear allowance)

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Tax query on furnished letting (re abolition of wear and tear allowance)

    Hello all,

    I will be a first time landlord from next month onwards. My question is specifically relating to the abolition of wear and tear allowance for fully furnished property letting.

    In my case, I am moving out of my own home (due to work relocation), so I am becoming a landlord by chance not necessarily by choice All my furniture (sofas, tables, beds) are less than 3 year old and they still look quite new so I am thinking of letting out the property fully furnished with these.

    Now since I won't be able to claim wear & tear tax allowance, would it be better to buy new furnitures (and take my old ones with me to an unfurnished property)? I obviously am not very keen to let the tenants use the existing furniture if I am not getting any tax allowance for its use (especially they are all very good quality furniture).

    Or would I be able to allocate fixed cost for the existing items as I am just about to let out the property for the first time?

    Really appreciate your thoughts and help. And apologies in advance if a similar question has already been answered or if what I have said is with lack of knowledge!

    Many thanks

    #2
    I'd take the furniture with you and rent your property unfurnished.

    You can offset the cost of any new furniture you buy for your rental business against tax, but you still have to buy it, and, even if you're a high rate tax payer, you only save a percentage of the cost of the furniture in tax.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment

    Latest Activity

    Collapse

    • Will they raise taxes again?
      by JK0
      My accountant just finished my 2020/21 tax return, and my income is half of the previous year. I did not think it would be quite that bad. (Half my tenants moved out, and I had a job to replace them. Plus had to get fourteen EICR's!)

      I'm guessing you guys are in a similar boat. Never mind...
      27-11-2021, 20:20 PM
    • Reply to Will they raise taxes again?
      by JK0
      The EICR's cost around £12k in total....
      27-11-2021, 22:48 PM
    • Reply to Will they raise taxes again?
      by Neelix
      14 EICRs isn’t going to dent the income from 14 properties

      its the void periods that cost you...
      27-11-2021, 22:37 PM
    • Reply to Corporation Tax
      by Thurrock1
      jpkeates,

      the other directors can't withhold information from them - I am my husband's agent as he has dyslexia and has difficulty with all this. This has been explained to the director but he does not like me and chooses not to recognise in that case anything I/my husband writes.
      ...
      25-11-2021, 09:39 AM
    • Reply to Corporation Tax
      by jpkeates
      If your husband is a director, the other directors can't withhold information from them; unless there are some very specific rules in the company articles - and they wouldn't normally be appropriate in a property development business (which are usually set up with boilerplate documentation).
      The...
      24-11-2021, 18:36 PM
    • Corporation Tax
      by Thurrock1
      Hi, Please can someone tell me if Corporation Tax only becomes payable to the IR on sale of an asset.
      My husband is a director of a property development company - there are only 3 directors.
      He wants to leave and there is no communication with the other directors and it is difficult to get...
      23-11-2021, 19:15 PM
    • Reply to Corporation Tax
      by theartfullodger
      IR (The Inland Revenue) were dissolved April 2005. Advise against sending them payments....
      24-11-2021, 17:50 PM
    • Reply to Corporation Tax
      by Thurrock1
      Thanks Gordon999. I have been phoning around about this today. This is a property development Ltd co. it had problems and so in 5 years only managed to develop 1 property - a house into flats. My husband owns one third of the company.

      It is not being sold. The other directors need to...
      24-11-2021, 17:47 PM
    • Reply to Corporation Tax
      by Gordon999
      The company pay CT on the "trading profit" reported in the annual accounts.( which are filed annually at Companies House).

      After the asset (the building) has been sold, the trading profit will be reported in the next annual accounts by accountant and CT will be payable to...
      24-11-2021, 11:33 AM
    • Reply to Student HMO and Holiday let
      by Neelix
      In most areas student houses don't pay council tax ....... move in a "non student" and Council tax will apply
      18-11-2021, 07:54 AM
    Working...
    X