In the last Budget, it was announced that landlords of furnished properties will no longer automatically be able to deduct 10% as a tax break for wear and tear (W&T) as from 6^th April 2016.

Currently, such landlords can deduct 10% of their rent from their profit to account for wear and tear, irrespective of their expenditure. The allowance is given as a deduction in computing the profit from the taxpayer’s rental business and aims to provide relief for items of furniture and fixtures contained within a let furnished residential property.  It is designed to cover items that a landlord would typically provide in furnished accommodation, such as:

• beds, chairs, sofas, wardrobes, tables and other items of moveable furniture;
• televisions;
• fridges and freezers;
• carpets and other floor coverings;
• curtains and linen;
• crockery or cutlery;
• cookers;
• washing machines and dishwashers etc.

The W&T allowance meant that landlords could reduce their tax liability even when they had not improved the property.

Instead, from next year, they will only be able to deduct from their tax bill the costs they actually incur.

Note that HMRC is indicating that the tax deduction will only be allowed for like-for-like replacements. So, if you replaced a standard HD television that cost £450 with an ultra HD TV costing £750, you would only get a tax deduction for £450.

Since you can claim the W&T allowance anyway for the rest of this tax year, it makes sense to defer replacing new furniture etc. until after 5^th April 2016, (1^st April for company landlords), when you will be able to claim the actual cost (subject to like-for-like) under the new renewals allowance.