Landlords of fully furnished residential lettings are currently able to claim a deduction of broadly 10% of gross rental income.
This is to compensate for not being able to claim any tax relief on the capital cost of fixtures and fittings.
The wear and tear allowance was abolished from the 2016-17 tax year and replaced by a deduction for the replacement cost of any existing capital items such as free-standing fridges, beds, sofas etc.
Unlike the wear and tear allowance this new relief is also available for partly-furnished properties.
To claim any replacement costs receipts for the expenditure must be kept and evidence that it is a replacement may be necessary as the relief is not for additional assets only replacement assets.
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