.jpg)
Questions and Answers
Landlords and tax relief on furnishings
I’ve heard Wear & Tear Allowance is coming to an end. What should I be doing?
Under current proposals, from next year the annual Wear and Tear Allowance will be removed. The Wear and Tear Allowance serves to reduce property income and is available against lettings of furnished, residential properties. It was intended to account for the deterioration of the fixtures and fittings. It does not cover fixtures that are deemed to be “integral” to the building, such as baths, toilets, etc.
Instead of the Wear and Tear Allowance, landlords will be able to deduct the actual costs they incur on replacing furnishings in the property; but no tax relief will be available on the initial cost of furnishing a property. The new relief will be available to unfurnished and part-furnished properties, as well as fully-furnished.
If you are planning significant refurbishments, you may wish to postpone spending too much until after April 2016 to take advantage of the new relief. Alternatively, if your properties need very little upkeep from year-to-year, you may unfortunately find you are worse off under the new relief.
There are a number of recent and forthcoming changes that affect the tax treatment of rental income. If you would like to discuss your affairs in more detail, please contact us and we'll put you in touch with your local TaxAssist Accountant.
Date published 5 Mar 2016
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.Choose the right accounting firm for you
Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?
Local business focus
We specialise in supporting independent businesses and work with 100,000 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.
Come and meet us
We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.
Switching is simple
Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.