PR HartleyFCA

Chartered Accountant & Registered Auditor

Landlords / Buy to Let


Wear & Tear

added 3 March 2016

From April 2016 the formal Wear and Tear Allowance - which allows 10 per cent of rental profits to be written off for notional wear and tear, even if there has been no such actual expenditure in that particular year - will be replaced with a relief that enables all landlords to deduct the costs they actually incur on replacing furnishings in the property. You'll do so by providing itemised receipts that show the replacement goods you've purchased or repairs you've carried out.

HMRC has announced the scope of the changes in a consultation document. One important point is that whereas the old wear and tear tax break applied only to fully-furnished properties, agents and landlords will in future no longer need to decide whether their property is sufficiently furnished to claim the new replacement furniture relief. This is because the new relief will apply to all landlords of residential dwelling houses, no matter what the level of furnishing.

More information on the changes to the Wear and Tear Allowance can be found on the gov.uk website.

3% stamp duty surcharge

added 3 March 2016

From 1 April 2016, higher rates of Stamp Duty Land Tax (SDLT) (3% above the current rates) will be charged on the purchase of additional UK residential properties. This may impact buy to let investors.

For example, a property bought now for £500,000 would attract an SDLT rate of 5% or £25,000. But after 1 April it will be 8% or £40,000 if the purchaser already owns one or more UK residential properties.

More information on the increase in Stamp Duty Land Tax can be found on the gov.uk website.