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Unfurnished residential property lettings – loss of tax relief

Posted by Andy Richens on 7/31/2013

If you let a property unfurnished, or only partly furnished, there was previously a non-statutory renewals allowance that could be claimed on the replacement of white goods, cookers, carpets and curtains included in the property. This allowance has been withdrawn by HM Revenue and Customs from April 2013.
This leaves you with the following options:
  • Accept that there will be no future tax relief on replacement of these items, or 
  • Let the property as fully furnished, which would give rise to a wear and tear allowance which continues and is intended to allow for the depreciation of the furniture and fittings. The allowance is 10% of the net rents after deducting costs normally borne by the tenant but paid by the landlord such as council tax, water and sewerage rates. To qualify as a fully furnished let, the tenant must be able to occupy the property without needing to provide their own beds, chairs, tables, sofas and other furnishings.
  • Create a new letting agreement in which it is the tenants’ responsibility to bear the cost of renewals.
This does not affect allowances claimed for furnished holiday accommodation.
Please do not hesitate to contact your usual Bishop Fleming adviser to discuss further.

This blog is based on our interpretation of the relevant rules and legislation at the time of posting, and does not constitute professional advice. You should consult a suitably qualified professional on any specific query you may have in connection with this topic.

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