The 10% wear and tear allowance was designed to cover general depreciation of items in a furnished property. It would cover things like beds, televisions and kitchen appliances.
It was abolished from 6 April 2016. Instead there is replacement of domestic items relief. It has to be a like for like:
HMRC manuals:
www.gov.uk/hmrc-internal-manuals/property-income-manual/pim3010
www.gov.uk/hmrc-internal-manuals/property-income-manual/pim3210
www.gov.uk/hmrc-internal-manuals/business-income-manual/bim46911
Example: Replacement of domestic items relief
In 2016/17, A replaces various items in the property which he lets out furnished. He replaces the sofa at a cost of £700, and the washing machine at a cost of £300. It costs him £10 to dispose of the old washing machine. He sells the old sofa on e-bay for £150.
In working out the profits of his property rental business for 2016/17, he is able to claim a deduction of £860 (the cost of the replacement items (£700 + £300), plus the cost of disposing of the fridge (£10), less the proceeds from the sale of the old sofa (£150)).
Example: Restricted relief
B lets out a property unfurnished. In 2016/17, she replaces the fridge with a fridge-freezer costing £600. Had she replaced the fridge with a similar fridge rather than a fridge-freezer, it would have cost her £400.
She is able to claim a deduction for part of the cost of replacing the fridge with a new fridge-freezer. However, this is capped at £400 – the cost of a like-for-like replacement.
In the second linked HMRC manual, it makes clear that fixtures are not domestic items and do not qualify for ‘Replacement of Domestic Items Relief’. Examples of fixtures are baths, washbasins, toilet, fitted furniture etc.
Now you need to read the third link about Specific deductions: repairs and renewals: what is a repair: the ‘entirety’ examples:
Example: Refitting a kitchen:
S owns a number of residential properties that she lets. The properties are not furnished lettings.
The boiler in one property needs replacing. As the new boiler has to be located in a different position, Sophia decides to modernise the kitchen as a whole.
All the existing base units, wall units and sink etc, are stripped out and replaced, as is the fitted cooker and hob. New units of an equivalent quality are installed but in a different layout to allow for the re-location of the boiler, finally the kitchen is re-plastered and re-tiled.
The entirety is the house, not the fitted kitchen. The new kitchen is slightly different but it does the same job as before. Sophia has simply replaced the old kitchen with a modern equivalent. This is a repair and allowable expenditure.
