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From April 2016 the wear and tear allowance will end, to be replaced by a deduction for landlords when they actually spend the money. It remains to be seen whether the deduction for money spent will apply to all expenditure, including that on kitchen appliances such as ovens, and whether it will be subject to a “cap”. Landlords of partly furnished properties were stopped from claiming for the replacement cost of white goods in 2013 – a move that has been very unpopular. Some of those landlords have now started to provide fully furnished homes so they will be very “disappointed” if their tax relief is once again restricted.
From April 2017, tax relief on interest for let domestic property will be restricted. The change affects property businesses (including single buy to lets) but does not affect furnished holiday lettings.
We can give an initial free consultation if you would like to discuss the above changes and offer help to enable you to decide what to do.
There is some good news rent a room relief will increase from £4,250 to £7,500 from April 2016. Small B&B establishments will also benefit as they can claim the relief too, provided the owners live on the premises.
Addison & Co