The simple answer is yes for residential properties, it will matter, where the property is let on an unfurnished basis.
In April 2013, HMRC removed the concession often referred to as the ‘renewals allowance’ for residential landlords. Previously under this concession, landlords were able to claim 100% tax relief on the cost of replacing any furniture within the property.
Following the change of policy, it is no longer possible to claim any tax deduction, where the property is let unfurnished, for the costs of replacing furniture such as free standing cookers, white goods- fridges, freezers, carpets, curtains and other similar items. However, landlords can still claim tax relief for repair costs associated with such items. In addition, HMRC have accepted in written correspondence with ICAEW, that the replacement of integrated white goods should qualify as repair.
As a landlord, you may therefore want to consider:
- Looking at letting properties on a fully furnished basis. Properties let on a fully furnished basis continue to be able to claim an annual “wear and tear” allowance.
- Going forward, consider installing fitted cookers and white goods into your properties.
- Where this is not possible, consider whether it would be more appropriate that the tenant provides such items.
For further details regarding integral or free-standing white goods, please contact Caroline Fleet on 020 7182 4760 or firstname.lastname@example.org.