Glossary · UK
What is Wear and Tear Allowance (abolished)?
A former tax relief for landlords of furnished residential properties, allowing a flat 10% deduction of net rent for the cost of replacing furnishings. It was abolished from April 2016 and replaced by the Replacement of Domestic Items Relief.
Full Definition
The Wear and Tear Allowance was a simplified tax relief available to landlords of furnished residential properties. It allowed a deduction equal to 10% of the net annual rent (rent received minus certain charges the tenant would normally pay, such as council tax or water rates if paid by the landlord). The allowance was intended to compensate for the cost of replacing furniture, furnishings, and appliances, but it was a flat-rate deduction regardless of whether the landlord actually spent anything on replacements in that year. It was abolished with effect from 6 April 2016 and replaced by the Replacement of Domestic Items Relief (RDIR). Under RDIR, landlords of residential properties — whether furnished or unfurnished — can claim a deduction for the actual cost of replacing a domestic item (furniture, appliances, crockery, curtains, etc.) on a like-for-like basis. There is no deduction for the initial purchase of items when the property is first let out. Where the replacement is an improvement on the old item (for example, a larger television), only the like-for-like cost is deductible, with the excess treated as a capital improvement. The RDIR applies to all residential lettings. Furnished Holiday Lettings (FHL) previously used capital allowances rather than the Wear and Tear Allowance or RDIR; following the abolition of the FHL regime in April 2025, FHL properties now follow the same RDIR rules. The old Wear and Tear Allowance should not be confused with capital allowances (which do not apply to residential property) or with the annual investment allowance available to commercial landlords.