Tax Glossary

Wear and Tear Allowance

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Last updated on:
March 17, 2024

Historically, landlords leasing furnished properties in the UK could utilise the Wear and Tear Allowance, enabling them to deduct 10% of the net rent annually to account for furniture and fixture depreciation. This straightforward method offered a uniform deduction regardless of actual expenditure on replacements.

However, as of April 2016, this system underwent a significant transformation with the introduction of the Replacement of Domestic Items Relief. This new approach shifted the focus towards a more precise accounting of expenses, allowing landlords to claim for the actual cost of replacing domestic items within their rental properties. This adjustment aimed to align tax deductions more closely with the landlord's actual expenditures, promoting fairness and accuracy in the tax system.

The Replacement of Domestic Items Relief covers various household items provided for tenants' use, including furniture, appliances, and kitchenware, emphasising the need for landlords to maintain detailed records of their expenses to maximise their tax benefits under this revised scheme.

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