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  • Unit 19 Wear and Tear Allowance

    Hi there - am I right in thinking that wear and tear allowance is not pro-rated if the rental income for a period of less than 12 months?
    Eg rent Jan10-Apr10 @ £100 = 300

    Wear and Tear Allowance would be 10% x 300 = 30 Not 30 x 3/12.

    Hope I am making sense!

    Nicky

  • #2
    from HMRC Site

    PIM3200 - Furnished residential property: wear and tear allowance
    Summary
    Income from furnished lettings is part of the taxpayer's rental business. Generally the same rules apply as for other lettings.

    But where a taxpayer lets a residential property furnished, plant and machinery capital allowances can’t be claimed on furniture, furnishings or fixtures within the property. Instead a deduction can be claimed for either:

    •a wear and tear allowance of 10% of the ‘net rent’ from the furnished letting to cover the depreciation of plant and machinery, such as furniture, fridges etc supplied with the accommodation,
    "Its nice to be important, but more important to be nice"

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    • #3
      NickyW

      Originally posted by NickyW View Post
      Hi there - am I right in thinking that wear and tear allowance is not pro-rated if the rental income for a period of less than 12 months?
      Eg rent Jan10-Apr10 @ £100 = 300

      Wear and Tear Allowance would be 10% x 300 = 30 Not 30 x 3/12.

      Hope I am making sense!

      Nicky
      I understand wear & tear allowance is 10% of rent received, therefore already pro rated, but I understand it's 10% of rent received AFTER the deduction of council tax & water rates.
      e.g
      rent received for year £2000 (only rented for 6 months)
      council tax £500
      water rates £200
      wear & tear allowance= £2000-£700(500+200)=1300@10%= wear & tear allowance £130
      I have yet to take PTC so if someone else could confirm this is correct, it would be appreciated.

      Comment


      • #4
        Hi Susie

        I think you're correct

        I think you have to deduct any council tax and water rates paid by the landlord and any irrecoverable bad debts written off from rental income before you multiply by 10%

        Rental income (less) council tax paid by landlord (less) water rates paid by landlord (less) irrecoverable bad debts = Y

        Y x 10% = wear and tear allowance
        Regards

        Reader

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