28th
Oct 2015
The whole private rented sector is up in arms over Osborne’s impending legislation affecting tax relief on buy-to-let mortgages and wear and tear allowances. However the Chancellor can count on at least one ‘friend’ – the Association of Taxation Technicians.
Although the Association agrees with the change on the tax relief for the wear and tear allowance, it is concerned over one particular detail in the reform.
The Chancellors changes are due start from April 2016 and the wear and tear allowances’ change means that landlords will be able to receive relief on the actual costs of carrying out maintenance issues and replacing furnishings in their properties. Osborne believes that his proposals will lead to a fairer system of taxation in the residential property sector.
The Chairman of ATT Steering Group, Paul Hill, said :“Under the current system, which was introduced in 2013, tax relief is only available on residential lettings which have been let fully furnished and it can, at times, be tricky for landlords to ascertain whether the furniture provided results in a property being considered fully or only partly furnished. This proposed new method of tax relief will see this problem disappear.
However, the Association of Taxation Technicians concern is the detail in the “Improvement element” of the change.
Paul Hill commented :“This part of the proposals has the potential to lead to complexity and confusion and landlords will be looking to HMRC for detailed guidance on how the improvement rule should be applied.”
Paul Hill is calling for exact guidelines and believes that as technology in appliances is forever changing, the advice will need to be constantly monitored, as at times a like-for-like replacement may not be available.
Image Source: The Telegraph
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