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When, where and how may the 10% allowance for furnished lettings be claimed? SARAH SAUNDERS explains
KEY POINTS
- Defining what a furnished letting is.
- The renewals basis and the wear and tear allowance alternatives.
- The types of expenditure to which the relief applies.
- Restrictions applicable to the relief.
- Worked example.
At first blush the wear and tear allowance for furnished residential lets seems like one of the more straightforward sections of the tax legislation.
We all know that rental income is taxed on an accruals basis and that furnished lettings have a special tax deduction treatment.
If challenged anybody asked pronounces with great authority “10% of rent minus rates” and turns away.
This all seems very clear until you get down to working on a real case rather than a theoretical one.
Suddenly the possible array of expenses becomes huge and you end...
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