Guest Blog: Landlords, replace your white goods now!
This is the first in an occasional series of guest blogs from partners and friends. Here Liz Higgins, Private Client Service Line Manager at Critchleys, discusses Wear & Tear allowance
Landlords who let their properties unfurnished only have up to 5 April 2013 to claim the cost of replacing existing items.
If a residential property is being let fully furnished, landlords can claim the Wear & Tear allowance, which is calculated as 10% of the rent less council tax and water rates paid. This is intended to cover the cost of replacing any furniture, white goods, carpets and curtains etc, instead of claiming the actual costs.
If it is unfurnished, landlords cannot claim the Wear & Tear allowance. Also, they cannot claim the cost of adding any new items into the property for the first time, but up until 5 April 2013 they can claim the cost of replacing existing items. The rules change from 6 April onwards and they will no longer be able to claim the cost of replacements. So if they are going to replace any existing items in an unfurnished property, it is best to do it before 6 April, so they can claim a deduction for the expense.
Otherwise, for any unfurnished residential properties landlords will not be able to claim anything to cover the cost of replacing items after 5 April, unless they were to add enough furniture for the property to count as fully furnished, so they can then claim the Wear & Tear allowance. Fully furnished means having enough furniture so that the tenants could live there without necessarily providing any of their own furniture, so it can be a bit sparse as long as it has the basics – beds, table and chairs, cooker etc.
They can generally claim all expenses they incur for running the property, if they pay them and not the tenant. That includes council tax, water rates, buildings and contents insurance, mortgage interest (but not capital repayments), repairs and maintenance (but not capital improvements or additions), gas, electricity, tv licence etc.
If you have any queries, please contact me on 01865 261100 or visit www.critchleys.co.uk