Unit 19 Wear and Tear Allowance
NickyW
Registered Posts: 97 Regular contributor ⭐
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
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
0
Comments
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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,0 -
NickyWHi 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.0 -
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 allowance0
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