The ‘wear and tear’ allowance can only be claimed on rental property let as fully furnished. This means when it includes such items as a cooker, fridge, sofa, etc.
The allowance cannot be claimed on unfurnished or partly furnished properties. The usual ‘test’ of status is whether the tenant can walk into the property and live there immediately. It would also confirm the situation if the lease included the word ‘furnished’.
The claim is an annual allowance calculated as 10% of the net rental received after deducting any costs paid for by the landlord, which are normally the tenant’s burden – such as council tax.
Example:
John lets out a fully furnished property at a rent of £600 per month. Out of this £600 he pays £100, being the cost of the utility bills and the gardener each month.
John is allowed to claim ‘wear and tear’ allowance as follows:
Annual income = (£600 – £100 per month) x 12 months = £6,000.
Claim: £6,000 x 10% = £600.
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