HMRC proposals to replace Wear and Tear Allowance

ICAS has responded to the HMRC consultation to replace the Wear and Tear Allowance with Tax Relief for Replacement Furnishings in Let Residential Dwelling-Houses.

Main points

  • HMRC proposes to replace the Wear and Tear allowance
  • There is to be a Relief for Replacement Furnishings in Let Residential Dwelling-Houses
  • This will introduce more onerous record keeping requirements

Published:
16 October 2015

Read ICAS' submission

Download PDF


ICAS has responded to the HMRC consultation to replace the Wear and Tear Allowance with Tax Relief for Replacement Furnishings in Let Residential Dwelling-Houses.

Although the proposed tax relief is designed to improve consistency and fairness in the taxation of residential property businesses, achieving these aims is likely to require complex legislation and impose onerous record keeping requirements, particularly on landlords with only one or two properties.

ICAS has asked whether any alternatives to the proposal have been considered. For example, if the cost of the existing wear and tear allowance is deemed to be excessive the rate of the allowance could be reduced, with the option to elect instead for the proposed new regime based on actual expenditure.

The problems for unfurnished and partly furnished properties arose from the withdrawal of the non-statutory renewals basis from April 2013.  ICAS supports the reinstatement of this relief in statute but has noted that the proposals do not address expenditure in the period between April 2013 and the introduction of the new rules.

Topics

  • Consultations and responses
  • Tax

Previous Page