Replacement of domestic items and fixtures in residential properties

By Tolley
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The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Replacement of domestic items and fixtures in residential properties
  • Introduction
  • Replacement of domestic items relief (2016/17 onwards)
  • Replacement of fixtures (2013/14 onwards)
  • Statutory wear and tear allowance (2011/12 to 2015/16)
  • Statutory renewals basis (2015/16 and prior years)
  • Non-statutory renewals basis (2012/13 and prior years)
  • Non-statutory replacement of fixtures (2012/13 and prior years)
  • Non-statutory wear and tear allowance (2010/11 and prior years)

This document discusses all the available reliefs for residential property businesses such as replacement of domestic items relief (2016/17 onwards), replacement of fixtures (2013/14 onwards), statutory wear and tear allowance (2011/12 to 2015/16), statutory renewals basis (2015/16 and prior years) and others.

 

Introduction

The distinction between revenue and capital expenditure is an important one for property businesses. This is because revenue expenditure is allowable, provided it is incurred wholly and exclusively for the purposes of the property business. See the Allowable property expenses guidance note. Capital expenditure is usually disallowed, although capital expenditure incurred in relation to a commercial property may qualify for capital allowances, see the Capital allowances guidance note.

However, from 2017/18 onwards, the revenue / capital divide is reformed if the profit or loss of the property business is calculated using the simplified cash basis. Under those rules, which apply automatically unless certain conditions are met (eg profits of over £150,000 in the year, or the business owner elects for the accruals basis to apply instead), all expenditure is an allowable deduction unless it falls into an excluded category. See the Simplified cash basis for unincorporated property businesses guidance note.

Where the property business includes residential property, additional specific reliefs may be available, irrespective of the basis of assessment used to calculate the profits and losses. These are discussed in this guidance note.

Summary of available reliefs for residential property businesses

The reliefs surrounding revenue deductions for capital expenditure in respect of residential property businesses have changed significantly in the last few years and it can be difficult to keep track of what was in force for which year. In summary:

Relief2010/11 and prior years2011/12 to

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