Feb 14

Tax tips for 'Wear and Tear' Allowance

The ‘wear and tear’ allowance can only be claimed on rental property let furnished when it includes such items as a cooker, fridge, sofa, etc.

The allowance cannot be claimed on unfurnished or partly furnished properties.

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.

‘Wear and Tear’ Allowance 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.

‘Wear and tear’ allowance claim: £6,000 x 10% = £600.

About the author

Amer Siddiq Photograph Amer began investing in property in 1999. Prior to this, he designed specialised, custom solutions for retail companies. He spent several years travelling the world, designing easy to use software and powerful solutions for some of the biggest retailers in the world.

When Amer began to grow his own portfolio, he naturally looked around for a software solution to help him with the task of property management. He quickly realised that there was nothing suitable available and so designed his own tool based on his personal experiences and needs.

His aim was to design a solution to overcome the five biggest property management challenges faced by landlords with growing portfolios:

•Getting better organised: cutting the time spent handling paperwork
•Staying legal: Keeping track of safety certificates and legal documents
•Tenant management: Making sure tenants get the information they need
•Income tax management: Knowing what is due and when
•Maintaining and growing a positive cash-flow

Amer is also the founder of the following websites:

Property Tax Portal
Property-tax-portal.co.uk is the UK's largest website that is dedicated to helping landlords, investors and developers to slash their property taxes.

Tax Insider
TaxInsider.co.uk is a fast growing magazine subscription business that helps UK tax payers to maximise profits by paying less in taxes.

Landlord Vision
LandlordVision.co.uk is our latest and exciting new project. Launched in November 2013 - It is our new solution whereby landlords can manage every aspect of their property business in the cloud - anytime, anywhere and on any device.

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