Normally a business will claim capital allowances on any plant and equipment purchased for use in the business.
You cannot make a claim for capital allowances if the equipment is for use in a dwelling house i.e. in a buy-to-let property.
HMRC will allow landlords to claim for the depreciation or loss in value of moveable items such as: furniture, furnishings, carpets, cutains, electrical goods, cutlery and crockery through a wear and tear allowance or a renewals claim.
A wear and tear allowance
The wear and tear allowance is calculated as 10% of net rent from a fully furnished letting. The property must be fully furnished and ready for letting. The provision of nominal furnishings will not be sufficient to make the claim.
The renewals claim
This claim allows an immediate tax deduction against rental income for the replacement on a like-for-like basis for furniture, furnishings, carpets, cutains, electrical goods, cutlery and crockery.
If the property is let furnished the landlord must choose which claim to make as you cannot claim under both wear and tear and renewals.
If the property is let unfurnished or semi-furnished then your only option is to claim on renewal of the assets.
What about repairs?
Repairs can be claimed against income, including repairs of fixtures, such as bathrooms, kitchens and central heating.
In addition, repairs can be claimed when replacing fixtures, such as kitchens and bathrooms (even if the 10% wear and tear allowance is being claimed).
If you own a buy-to-let property and you would like help in preparing your income tax return then please contact Clearways Accountants on 01737 244298.