Income Tax (Trading and Other Income) Act 2005 section 311A

Replacement domestic items relief

Section 311A provides a tax deduction for landlords who replace domestic items such as furniture, furnishings, household appliances and kitchenware in a let dwelling-house, subject to certain conditions.

• Landlords carrying on a property business may claim a deduction for the cost of replacing domestic items in a let dwelling-house, provided the old item is no longer available for use and the new item is provided solely for the tenant's use.
• The deduction is limited to the cost of a like-for-like replacement — if the new item is of a higher specification, only the amount that a comparable replacement would have cost is deductible, though any incidental capital costs of disposal or purchase may be added.
• The deduction is reduced by any proceeds received on disposal of the old item, whether through part-exchange or separate sale, including proceeds received by a connected person.
• No deduction is available where rent-a-room relief applies to the dwelling-house for the same tax year, where capital allowances can be claimed on the expenditure, or where the expenditure fails the wholly and exclusively test.

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