replacing furnitre for property income

Bban12313y ago

Hi replacement of damaged furniture in a property income calculation can not be deducted because of the wear and tear allowance is this a capital expenditure? the rule for calculating trading income says "cost of restoration of an asset ... is revenue expenditure" I deducted the cost of replacement of damaged furniture from the accrued property income revenue, but it was wrong according to the solution. Thanks

TTTax Tutor13y ago#1

When dealing with furnished lettings the 10% wear and tear allowance represents the way that tax relief is given for capital expenditure. Replacement means buying a new asset to replace the old on. This is capital expenditure and is covered by the 10% wear and tear allowance, as compared to repairing or restoring the old asset which would be revenue expenditure and an allowable deduction therefore against property income.