I have managed property for 15 years, mostly furnished but sometimes not and sometimes part. HMRC did not want me to keep changing from one to the other, so I maintained them all as furnished to get the 10% off rental income offset against tax. When does the property become unfurnished and require me to inform HMRC differently so that I do not get the 10% offset for all properties?
Arthur Weller Replies:
If you look at
you can see that it is only possible to claim the 10% wear and tear allowance for fully furnished accommodation. If it doesn’t meet this criteria, it is not claimable. So I cannot understand how you could have claimed the 10% allowance in past years for those properties that were not fully furnished. In this matter each property is looked at individually.
HMRC say: “But the deduction is only due if furnished accommodation is genuinely provided. A furnished property is one that is capable of normal occupation without the tenant having to provide their own beds, chairs, tables, sofas and other furnishings, cooker etc. The provision of nominal furnishings will not meet this requirement. If the accommodation isn’t furnished, or only partly furnished, the 10% wear and tear allowance isn’t due.”
This question was first printed in Tax Insider in February 2012.