Tax on Landlords

Nov 11, 2013

As many Landlords will already know, the rules for claiming tax relief on rented properties changed significantly with effect from 6 April 2013.

Landlords will no longer be able to claim tax relief on the cost of replacing furnishings within the property.  Furnishings include sofa’s, tables, suites, beds, cookers, washing machines, dishwashers, carpets, linen, crockery or cutlery.

Whether the property is furnished or unfurnished will determine the costs which can be claimed against rental income to reduce the tax liability. Claimable costs are as follows:

Unfurnished Properties

  • Repairing (not replacing) furnishings
  • Repairing or replacing integral fixtures, such as baths, washbasins and toilets

Furnished Properties

  • 10% of the rental income, more commonly known as a “wear and tear allowance”

Landlords of furnished or unfurnished properties may therefore find it is worthwhile to take out insurance to cover the cost of replacing items within the house if they were to break.  The insurance cost will be tax deductible and you will get a brand new replacement if anything gets broken, which will keep your tenants happy!

Every property will have different issues and amounts available to claim, so I would always recommend speaking to your Accountant to make sure you keep your tax liability to a minimum.

If you have any questions regarding anything above and would like some more information please contact us.  All initial meetings are free of charge and of course at no obligation to you.

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