Welcome to our weekly Wednesday Tax Tips!
Number 1: The wear and tear allowance
This is an allowance that HMRC offers landlords who have fully furnished properties to make it simpler to work out the cost of wear and tear in furnished properties.
Note: the word furnished is the key as it doesn’t apply to part-furnished or un-furnished properties.
Under the wear and tear allowance you can offset 10% of the annual rental income against your property investment income tax.
It sounds great! And simple! But there are a number of factors to take into account – including the cost of the furniture and how often you may need to replace it.
Letting Agents Watford are not qualified to give you tax advise so PLEASE seek qualified accountant to discuss the pro’s and con’s as there are always two sides to the coin. It’s well worth asking about this one!