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If you let a property furnished, it may be beneficial to delay spending money on replacing furnishings until on or after 6 April 2016. This is because 2015/16 is the last year for which the 10% wear and tear allowance is available (see Tip 81). The allowance, which can be claimed regardless of whether items are replaced in the year is to be replaced by a deduction for the actual costs of replacement from 2016/17. Delaying the replacement of furnishing until the 2016/17 tax year will allow you to claim the wear and tear allowance for 2015/16 and relief for the actual cost of replacement in 2016/17.

Example:
Karen has let a property furnished for many years. In 2015/16 she receives rents of £15,000.

She plans to replace the curtains in the property which will cost her £1,000.

She claims the 10% wear and tear allowance for 2015/16 of £1,500 (£15,000 @ 10%).

If she replaces the curtains before 6 April 2016 (i.e. in the 2015/16 tax year), she will obtain no further relief. However, if she delays the replacement until after 5 April 2016, she will receive relief for the actual cost of replacement in 2016/17 in addition to the wear and tear allowance for 2015/16. If she is a higher rate taxpayer, delaying replacing the curtains will save her £400 (£1,000 @40%).