From April 2016, this allowance will be abolished and replaced with a deduction based on the “actual costs of replacing furnishings”
The government has launched a consultation about the best way to implement this change, and it suggests that the rule change in 2013 concerning the replacement of freestanding white goods in “unfurnished” accommodation could be reversed.
It is suggested that the cost of replacing the following:
• movable furniture or furnishings, such as beds or suites
• fridges and freezers
• carpets and floor-coverings
• crockery or cutlery
• beds and other furniture,
will be an allowable expense deduction.
The replacement of fixed fittings will still be allowed as a repair, but the initial cost of buying or installing new equipment will not be allowable, neither will the cost of improvements to existing furnishings, such as replacing a fridge with a fridge/freezer.
Given the circumstances our current advice is that landlords of furnished lettings, who currently claim the wear and tear allowance, should try and avoid replacing items of furnishings before 6th April 2016 as there might be additional tax allowances available for them after that time.
If you want to know more about what this could mean for you, or if there is anything that can be done to minimise the impact on your after tax income, please contact Ian Huggett on 01271 374138 or email firstname.lastname@example.org
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