In December 2011, extra-statutory concession B47 (AKA the “renewals allowance”) was abolished, but it was unclear as to whether this change only related to furnished property.
Up to 5th April 2013, anyone letting a qualifying property had the option of either taking a deduction against rental income for the actual cost of replacing furniture and appliances (but not the initial purchase of either category) within the property; or making a claim for the 10% wear and tear allowance against rental income if it was furnished.
i. Plant: items that are relatively large and durable;
ii. Tools of the trade: such as crockery and cutlery, bed linen and cushions but not carpets, sofas, beds and free-standing cookers and fridges;
iii. Repairs: of the asset in its entirety.
This change has caused a lot of confusion and many have argued that there is still too much ambiguity.
Time for a change of strategy?
Landlords may now decide that it is worth investing in a few white goods and some beds to make the let furnished so that the 10% allowance is available to them. This would certainly be beneficial where rent yield is high such as city centre locations and a no brainer where HMOs/student lets are concerned.
If you are unsure about what you can claim for, or would like to know more about how your property can qualify for a deduction equal to 10% of rents received, George Hay are teaming up with local lettings experts, Maxine Lester Residential Lettings to deliver a free seminar in the Autumn. This event will be by invitation only and with limited places; if you want to be certain of an invite, contact Tania Fullalove on 01480 494939 to register for regular lettings news.
The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.
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