UK Landlord Forum / Life

I've been told but I need to get it verified by my accountant that if I let a property unfurnished (which was my intention) and inform the Inland Revenue of that, then later I wouldn't be able to claim 10% wear and tear if I decided to start letting it furnished. The vise-versa applies too so basically once you start off one way you cannot switch with respect to how you offset expenses against tax. Is that correct? Sounds daft.

That doesn't sound right at all.
Don't quote me on that, but i think as long as you declare the right status of your property, you should be able to claim the appropriate tax benefits.

Hmm just been ont he gov website and it says:

Quote

UK and overseas furnished residential lettings

For furniture and equipment provided with a furnished residential letting (excluding UK furnished holiday lettings) you can claim a 'wear and tear' allowance. The allowance is 10 per cent of the 'net rent' - this being the rent received less any costs you pay that a tenant would usually pay.

As an alternative to the wear and tear allowance, you can claim a 'renewals' allowance. This covers the cost of replacing furniture or equipment, including small items like cutlery. To work it out, take the cost of the replacement item and deduct from it:

    * the amount you sold the old one for (if you got anything for it)
    * anything extra you paid for a better one

Once you've chosen which of these allowances to claim for a property, you can't switch between them from year to year.

The last line is pretty vague- it says you can't switch from year to year, but it doesn't say you can't switch if you suddenly decide to have a furnished property after 5 years of having unfurnished.

I think it just implies you can't keep switching frequently. It doesn't say you're perminantly stuck with a furnished/unfurnished status

I think they left that vague deliberately so they can interpret it as they wish and which ever way suits them at the time

So what happens if I decide to let furnished and then the tenant decided he doesn't want the furniture so it all gets removed? From my quick calcs, claiming 10% wear and tear is a better tax break then the unfurnished option.

Once you have made the decision to accept 10% wear and tear you can't change it! Otherwise everyone would do it and HMRC have got wise to it. Loophose closed!

Jools

Quote from: Jools on February 20, 2009, 12:33:51 PM
Once you have made the decision to accept 10% wear and tear you can't change it! Otherwise everyone would do it and HMRC have got wise to it. Loophose closed!

Jools

Ahh so once you choose, THAT'S IT? Can't even change 5 years down the line?
Tough crowd...