A warning to Buy to Let landlords - you need to be ready for all these big changes

We have just been talking to a client who is a Buy to Let landlord - she was blissfully unaware of all the changes heading her way.

She is not untypical of many busy clients of ours, who have enough to do just keeping up with their own work, without having to anticipate an attack, by the government for whom they probably voted, on the very cautious wealth creation tactics that have previously been encouraged by conservative administrations.

She was about to carry out repairs to one of her flats she owned and I suggested she waited until after 5th April when the rules for the wear and tear allowance are abolished.

For a long time, a "wear and tear" allowance of roughly 10% of gross rents would be available, if you had a property that was classed as a "furnished letting", instead of claiming the costs of renewing or repairing the furniture and equipment provided (this relief has effectively not been available since April 2013).

Many landlords were unaware of these changes in 2013.

However the rules change in April 2016, and in theory give relief for replacing items on a like for like basis. Please note that there is no capital allowance type relief for the cost of new furniture and equipment bought for a property - only for replacing existing furniture and equipment.

There is still a lack of clarity over what exactly can be claimed, but our advice is where possible to delay the expenditure until after 5th April, and this way a landlord with a furnished letting could claim the wear and tear allowance up to 5th April 2016, and also stand a chance to claim relief on a replacement after 5th April, a relief that would have been unavailable in the previous year.

A point to emphasise is that if you buy an existing Buy to Let property with furniture and equipment already installed, this could be seen as a more efficient way of buying a furnished letting, because you should be able to claim tax relief on replacing that furniture and equipment on a like for like basis.

It is a minefield and then unfortunately we still have the big question - can you trust "Boy George" - will he just change the rules further and should you maybe consider getting out quick before he causes house values to crash with his tinkering with such a large part of the property market.

We wish we knew - we cant say - who would have thought a conservative chancellor would ever attack brave entrepreneurs who were probably supporters of his own party

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