Furnished Property Wear and Tear

[thekingster]

Hi,

In April I purchased my second property and am actually living it in and renting 2 other rooms out. I have completely furnished the house. What I need to know is that I'd like to use all the furniture I brought as expenses, for example beds, wardrobes etc as this year it would come to quite a bit. What I want to know is about wear and tear allowance. I assume and correct me if I'm wrong - I can't use wnt this year? If so can I use it in future years if I claim the furniture under expenses now?

My net rent is £7700 so maybe it is worth me using wnt every year if it means I cant use it in subseqent years if I claim for the furnitre now...

EDIT - also, I HAD to renew my bathroom which is maintenance as it was leaking into the kitchen downstairs due to rotten tiles and frailed bath sealant, is this seperate to the above as it is maintenance?

Thanks in advance.

[Worldlife]

You may find the information and links in Landlord Allowances (http://www.landlordzone.co.uk/forums/showthread.php?t=2967) will answer some of the questions you have raised.

[Tax Accountant]

Hi,

In April I purchased my second property and am actually living it in and renting 2 other rooms out. I have completely furnished the house. What I need to know is that I'd like to use all the furniture I brought as expenses, for example beds, wardrobes etc as this year it would come to quite a bit. What I want to know is about wear and tear allowance. I assume and correct me if I'm wrong - I can't use wnt this year? If so can I use it in future years if I claim the furniture under expenses now?

My net rent is £7700 so maybe it is worth me using wnt every year if it means I cant use it in subseqent years if I claim for the furnitre now...

EDIT - also, I HAD to renew my bathroom which is maintenance as it was leaking into the kitchen downstairs due to rotten tiles and frailed bath sealant, is this seperate to the above as it is maintenance?

Thanks in advance.

(1) You should consider if Rent a Room relief works out better for you or not. This allows first £4,250 rent free and you have to pay tax on the rest without any allowance for any interest or other expense claims.

(2) You cannot claim any allowance at all for the cost of furnishings in the first year. Thereafter, you can claim the cost of any renewal expense as and when any of the original furnishings are replaced. This is called the renewals allowance.

If you choose to claim on the Renewals basis, you must make sure that you claim for the furnishings in the let rooms only and not other furnishings in the house which is also used by you.

ALTERNATIVELY, you could claim the furnishings wear and tear allowance. This will be 10% of the net rent (Gross rent less cost of any utility bills of the tenant paid by you). You can claim this deduction every year, including the first year, regardless of whether or not you replace the furnishings or the actual cost of the furnishings.

If you use the furnishings wear and tear alllowance, you cannot claim any cost for the original or replacement furnishings.

Once you choose to adapt either the renewal allowance or the wear and tear allowance, you must stick to this and cannot change to the other basis in later years.

(3) As you also live in the house, any loan interest and all other expenses must only be claimed relative to the let rooms and not for the whole house.

(4) A bathroom is not a furniture and is therefore outside the furnishings allowance. If you repair or replace a bathroom, this is within the repairs allowance and can be claimed in addition to any furnishings allowance. Make sure that there is no element of improvements as this is not allowed.

However, see (3) above regarding the need to claim only a proportion of any expenses which has a private use as well as a personal use.

Ramnik