Corporation Tax Act 2009 section 250A

Replacement domestic items relief

Section 250A provides a tax deduction for companies with property businesses that replace domestic items such as furniture, furnishings, appliances and kitchenware in let dwelling-houses.

• A company carrying on a property business that includes a dwelling-house may claim a deduction when it replaces a domestic item provided for the tenant's use, provided the old item is no longer available for use after replacement.
• The deduction equals the cost of the replacement item, but if the new item is not the same or substantially the same as the old one, the deduction is capped at what it would have cost to buy a like-for-like replacement.
• The deduction is increased by any incidental capital costs of disposing of the old item or purchasing the new one, but reduced by any proceeds or value received on disposal of the old item, including part-exchange value.
• The relief only applies where the expenditure is capital in nature, is wholly and exclusively for the property business, and no capital allowances can be claimed on the same expenditure.