Landlord Tax Changes
- Created at
- Slaters Accountants in Staffordshire
Articles By This Author
- HMRC takes back control of IT services
- HMRC to extend data gathering powers
- HMRC roadside fuel testing
- Tax Diary August/September 2015
- Tapered pensions annual allowance
- Who are Slaters Accountants?
- Small business changes
- Landlord Tax Changes
- Owner managed business accountants
- Paid too much or too little tax?
- Revenue Recognition in the Oil & Gas Industry unde...
- Accounting for Decommissioning Provisions under IF...
- Are you contracting with the public sector? You ne...
- To be a Company or to be a Sole Trader: that is th...
- The Impact of Flat Rate VAT changes on small busin...
- SELF-ASSESSMENT TAX RETURN 2015/16
- 5 Things never to ignore with your business bank a...
- Minimum wage increase – How will it affect your ...
- Self Assessment – Why do we Pay On Account?
- The Importance of Hiring a Great Accountant
There were a number of measures in the Summer Budget that will impact the taxation of property income. These include:
- the abolition of the 10% wear and tear allowance (see details below);
- the restriction of tax relief to the basic rate (20%) for loan interest on funds raised to purchase residential property for letting. This will be phased in over four years from April 2017; and
- the current £4,250 rent-a-room allowance is to be increased to £7,500 from April 2016.
The abolition of the wear and tear relief will apply from April 2016. It will be replaced by a new replacement furniture relief. The new relief will be available to landlords of unfurnished, part furnished and furnished properties. The relief will not apply to ‘furnished holiday letting’ (FHL) businesses and letting of commercial properties, because these businesses receive relief through the Capital Allowances regime.
The new replacement furniture relief will only apply to the replacement of furnishings. The initial cost of furnishing a property would not be included.
Under the new replacement furniture relief landlords of all non-FHL residential dwelling houses will be able to claim a deduction for the capital cost of replacing furniture, furnishings, appliances and kitchenware provided for the tenant’s use in the dwelling house, such as:
- movable furniture or furnishings, such as beds or suites,
- fridges and freezers,
- carpets and floor-coverings,
- crockery or cutlery,
- beds and other furniture
Landlords of furnished residential let property considering the replacement of these qualifying items in the current tax year, 2015-16, may be advised to defer expenditure until after 5 April 2016. In this way they will still maximise their claim to the present wear and tear allowance of 10% of rents for 2015-16, and be able to claim the new replacement furniture relief from 6 April 2016.
Remember to alway seek advice from a qualified, chartered accountant for the best advice.