Wear & Tear allowance - companies ?

Wear & Tear allowance - companies ?

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ESC B47 talks about the "taxpayer" being able to make a deduction of 10% from its rental income on furnished lettings. I have a company which owns furnished property and wonder if this can be claimed by a company as well as by individuals.
Simon Bird

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By ianyoung
17th Feb 2006 16:48

changes to computational rules in 1995
I think wear and tear allowances apply to both individuals and to companies and the change to the basis of computation of Schedule A income in 1995 didn't make any difference to the allowances.
An IR Press Release of 28 September 95 said:
'Following changes in FA 1995 section 39 and Schedule 6, which brought the income tax computational rules for income from property more into line with the computational rules for calculating trading income, it may be necessary at some stage in the future to look at whether a non-statutory wear and tear allowance continues to be appropriate for furnished lettings.'
And if you have any doubts as to whether B43 applies to companies you only have to look at the title of section B 'Concessions applicable to individuals and companies'.
HMRC are currently looking at all concessions in the light of the House of Lords decision in the Wilkinson case.

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By AnonymousUser
16th Feb 2006 16:52

My understanding was...
...that everyone had to use D I rules these days for Schedule A but that the weare and tear was an addition to it so was available for all. AFter all the capital allowances position for a company with a furnished let would be no different to an individual. Like Neil I've been claiming it and no-one has said anyhting - of course that doesnt mean its right!!

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By NeilW
16th Feb 2006 14:12

Audited
It goes through on the tax comps I do and audit are happy with it. That's good enough for me.

NeilW

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By carnmores
16th Feb 2006 13:49

Neil
more info please

i thought that if a company was involved sch A comps had to be prepared on D i rules and as such there is no 10% - am i wrong .

this is as per the june 2002 tax bulletin, 'broadly speaking the profits of a sch A business are now computed in the same way as profits of a trade' i took that to mean no 10% ded am i off beam

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By NeilW
16th Feb 2006 13:11

Yes
As long as they are fully furnished.

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By AnonymousUser
16th Feb 2006 18:19

I agree that I think the wear & tear allowance is available for companies.

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By AnonymousUser
16th Feb 2006 20:42

Malcolm
I am sure that was not exactly what you meant, but for the avoidance of doubt, the wear and tear allowance is not "in addition" to anything, but in substitution for the actual costs of relevant expenditure.

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By pondfield
17th Feb 2006 10:50

Thanks
Many thanks for all your comments. I have been claiming wear and tear allowance on this particular client for some years and never had it queried. This year I suddenly felt a twinge of doubt, hence the question. I feel more comfortable about claiming it now although still think it is arguable.

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