Furnished or Not: 10% Wear and Tear Allowance

RP72

First time landlord here and wanted to find out if my property qualifies for the 10% Wear and Tear Allowance. I'm letting fully furnished but tenant wants to bring their own beds / TV / sofa, which I've said is OK.

So I'm providing: kitchen white goods, cupboards/chests of drawers in both bedrooms, bookshelves, desks, dining table.

Does this qualify?

thanks!

Old_Git

yes .......................

00ec25

you would be wise to keep some evidence to support "yes"

A furnished property is one that is capable of normal occupation without the tenant having to provide their own beds, chairs, tables, sofas and other furnishings, cooker etc. The provision of nominal furnishings will not meet this requirement. If the accommodation isn’t furnished, or only partly furnished, the 10% wear and tear allowance isn’t due.
http://www.hmrc.gov.uk/manuals/pimmanual/pim3200.htm

therefore assuming you were originally going to provide the beds and sofa yourself where are yours now? Are they in storage and so able to be provided to future tenants or have you sold them?

obviously you need to document that the tenant requested to use their own but based on that you have still provided the majority balance of the furnishings to make it habitable and therefore are indeed eligible for the W&T allowance

RP72

00ec25 wrote: »

you would be wise to keep some evidence to support "yes"

A furnished property is one that is capable of normal occupation without the tenant having to provide their own beds, chairs, tables, sofas and other furnishings, cooker etc. The provision of nominal furnishings will not meet this requirement. If the accommodation isn’t furnished, or only partly furnished, the 10% wear and tear allowance isn’t due.
http://www.hmrc.gov.uk/manuals/pimmanual/pim3200.htm

therefore assuming you were originally going to provide the beds and sofa yourself where are yours now? Are they in storage and so able to be provided to future tenants or have you sold them?

obviously you need to document that the tenant requested to use their own but based on that you have still provided the majority balance of the furnishings to make it habitable and therefore are indeed eligible for the W&T allowance

As we're moving to rented accomodation ourselves I planned to take the sofa / beds with me, whereas I would have bought new if my tenant had wanted to keep them. I would provide beds/sofa again for new tenants in the future.

Do HMRC need proof that a place is fully furnished? If yes what do they need and how likely are they to ask for proof?

00ec25

RP72 wrote: »

Do HMRC need proof that a place is fully furnished? If yes what do they need and how likely are they to ask for proof?

unlikely
I suggest that:
a) a copy of your original advert showing it was marketed as a fully furnished let; and
b) correspondence with the tenants where they request to install named items clearly therefore establishing that the balance of items are LL provided

the above should be enough to show HMRC that you meet the requirement, afterall you do a self assessment tax return and HMRC will only spot check a few. If that happens I think you have a sound case for showing compliance with the rule

abankerbutnotafatcat

You don't need to provide proof but you need to be able to provide proof if they ask for it. In this case documenting the correspondence regarding the beds as suggested seems reasonable. Just remember that if you claim the allowance you cannot additionally claim for repair/replacement of these items.

Werdnal

I assume you will also have a full and thorough inventory of all the contents you are leaving and the condition of each item, so this is proof of the items the property was let with.

RP72

Werdnal wrote: »

I assume you will also have a full and thorough inventory of all the contents you are leaving and the condition of each item, so this is proof of the items the property was let with.

Of course.