Residential Landlords To Deduct The Cost Of Replacing Furnishings – April 2016
As of April 2016, residential agents and buy to let landlords will longer need to decide whether their property is sufficiently furnished to claim the new replacement furniture relief (RFR), which replaces the wear and tear allowance.
The relief enables all landlords to deduct the costs they actually incur on replacing furnishings in the property.
According to HMRC “The relief will apply to landlords of unfurnished, part furnished and furnished properties.
The relief will not apply to ‘furnished holiday letting’ businesses (FHLs) and letting of commercial properties, because these businesses receive relief through the Capital Allowances regime.
The new (RFR) will only apply to the replacement of furnishings. The initial cost of furnishing a property would not be included.
Under the new RFR, landlords of all non-FHL residential dwelling houses will be able to claim a deduction for the capital cost of replacing furniture, furnishings, appliances and kitchenware provided for the tenant’s use in the dwelling house.
Fixtures integral to the building that are not normally removed by the owner if the property was sold, would not be included because the replacement cost of these would, as now, be a deductible expense as a repair to the property itself.”
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