Wear and tear allowance tax questionMake Text Bigger
With the change in the wear and tear allowance, I am trying to work out the maximum I can spend in each rental property that I own for the 2016/2017 tax year that we are currently in. I’ve already replaced carpets and other furnishings in the properties and I’m trying to work out what the maximum spend on each property will be to get the 10% wear and tear allowance back.
From what I’ve found, the limit is 10% of net rent: “The wear and tear allowance is simply 10% of the net rents from let furnished accommodation. Net rent is the rent from the furnished properties less charges and services that are normally paid by the tenant but which are met by the landlord. Examples would be council tax, water rates etc.”
My understanding (from what I have read) of this is that my net rent will be the full amount of the rent taken in. For example, if my gross rental is £20,000 a year I have 2k to spend on the property on carpets etc.
I was concerned that net rent was the number left after £20,000 minus mortgage payments, buildings insurance etc etc. Leaving me 10% of a smaller number say for taking 10% of (to pick a number) £13,000. Leaving me only 1.3k to spend on furniture and carpets.
As I am currently changing furnishings in the properties I am concerned that I spend money now over the limit that I can’t claim back.
Does that make sense?
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