Wear and Tear Allowance

All in all

Hi,

I am wondering what the situation is here, the property that my wife owns in which she lived prior to us living together has been rented out since Feb 2014 so we are preparing tax return for that year.

She bought the house in 2006 and all the major expense was incurred that year - furniture, beds, decorating, etc.

I was looking up that you can claim capital expenditure over 8 years. Does that mean that be cannot claim any wear and tear allowance for this expenditure?

Thanks in advance for any help.

adrianw

Any expenditure incurred prior to the first letting is NOT an allowable deduction

barneystinson

adrianw wrote: »

Any expenditure incurred prior to the first letting is NOT an allowable deduction

That's correct generally, but this isn't a deduction, it's a wear & tear allowance. The issue for the OP is that the items in question are already 8 years old and therefore no longer within their tax life for capital allowances purposes.

All in all

barneystinson wrote: »

That's correct generally, but this isn't a deduction, it's a wear & tear allowance. The issue for the OP is that the items in question are already 8 years old and therefore no longer within their tax life for capital allowances purposes.

Ok - thanks for your help. So nothing that can be claimed here.

barneystinson

All in all wrote: »

Ok - thanks for your help. So nothing that can be claimed here.

Anything more than 8 years old, strictly according to the letter of the law, no. However, what normally happens in practice is that you just value the furniture & fittings on the date letting commences, and claim a wear & tear based on that. Won't amount to much probably, as you're talking about 12.5% of a relatively low value...

All in all

barneystinson wrote: »

Anything more than 8 years old, strictly according to the letter of the law, no. However, what normally happens in practice is that you just value the furniture & fittings on the date letting commences, and claim a wear & tear based on that. Won't amount to much probably, as you're talking about 12.5% of a relatively low value...

Thanks - that will be a help anyway.

I presume thing like washing machine, dryer, cooker, suite of furniture, beds can be claimed for.

Marcusm

Age has nothing to do with claiming capital allowances; delivery drivers and taximen can purchase 9 year old vehicles and claim capital allowances! What matters is the period since the expenditure was "incurred" for capital allowances purposes. As your wife purchased them for personal use, Revenue practice is to permit a measure of allowances to be taken. BS suggests (as he has done before) that calculating a notional written down value is the method; another is to regard them as appropriated at fair value to the letting business and commence writing them off over 8 years from now. I think that is the better view; with smartphones it is easy to photograph the items, compare to eBay or donedeal or similar sights and work from those values.