Replacing the sofa, the fridge or the carpets in a let home: what the relief covers, and the like-for-like cap
When a landlord replaces furniture, appliances or furnishings in a let home, the cost is deductible, but only for a replacement, only up to what a like-for-like item would have cost, and only after taking off anything received for the old one. Furnishing a property for the first time gets no relief at all. Fixtures fall outside the relief altogether, which usually helps rather than hurts. Here is where the lines fall, item by item, with worked figures.
Why the relief has to exist
A sofa bought for a let flat is a capital item. The ordinary rule for a property business bars a deduction for capital expenditure, and capital allowances are not available on furniture and equipment inside a dwelling. Without something more, a landlord would get no income tax relief for furnishing or refurnishing a let home at any point. The something more is replacement of domestic items relief, in section 311A of the Income Tax (Trading and Other Income) Act 2005 for individuals and section 250A of the Corporation Tax Act 2009 for companies. It has applied since April 2016, when it replaced the old 10 per cent wear and tear allowance, and since April 2025 it has also covered former furnished holiday lets, whose separate exclusion was removed when that regime was abolished. HMRC's manual page on the relief still lists furnished holiday lettings as excluded, so read it with that in mind. The relief is narrower than most landlords assume, and the gap between what they claim and what the section allows is almost always in one of four places: the first purchase, the upgrade, the proceeds of the old item, and the difference between a domestic item and a fixture.
The conditions, read as a landlord would read them
There are four. The business must be a property business letting land that consists of or includes a dwelling-house. An old domestic item must have been provided for use in the dwelling-house, and the landlord must incur expenditure on a new one that replaces it, is provided solely for the use of the tenant, and leaves the old item no longer available for use there. The expenditure must be of a kind that would pass the wholly and exclusively test but fail only because it is capital, whether the business uses ordinary accounts or the cash basis. And no capital allowance may be claimable on it. Two further points follow from the wording. The words solely for the use of the lessee mean a property the owner also uses, even occasionally, does not qualify. And there is no requirement that the property be let furnished, so a washing machine or a fridge replaced in an otherwise unfurnished let is within the relief in exactly the same way. Finally, no deduction is allowed in a year in which rent-a-room relief applies to receipts from that dwelling.
What is a domestic item, and what is a fixture
The section defines a domestic item as an item for domestic use, such as furniture, furnishings, household appliances and kitchenware. HMRC's examples are moveable furniture such as sofas, tables and bed frames; furnishings such as curtains, rugs and carpets; household appliances such as fridges, freezers and washing machines; and kitchenware such as utensils, crockery and cutlery. Carpets surprise people: they are on HMRC's list as furnishings. What the relief excludes is anything that is a fixture, meaning plant or machinery installed or fixed in or to the dwelling so as to become, in law, part of it, and expressly including a boiler or a water-filled radiator installed as part of a heating system. HMRC gives baths, washbasins, toilets and fitted wardrobes as examples. Falling outside the relief is not the bad news it sounds. A fixture is part of the building, and replacing a worn fixture with a like-for-like equivalent is normally a repair, deductible in full as a revenue expense, provided the work is not the replacement of an entirety, such as a whole building, or so extensive that it becomes an improvement. A like-for-like boiler replacement is therefore usually a repair. An integrated appliance built into a fitted kitchen sits on the line between the two and is worth thinking about item by item rather than by habit.
The like-for-like cap, with figures
Where the new item is the same or substantially the same as the old one, the deduction is what the new item cost. Where it is not, the deduction is capped at what a like-for-like replacement would have cost. HMRC is sensible about wear and tear here: a brand new item is not an improvement merely because it is new, and its manual gives the example of a new budget washing machine at around GBP 200 replacing a five year old one that cost about the same. When the relief was introduced, the government described the target as a like-for-like or nearest modern equivalent replacement, which is the sensible way to read the cap where the old model is no longer made. Two adjustments then apply. Incidental capital costs of disposing of the old item or buying the new one, such as delivery, installation and removal, are added. And anything received for the old item is taken off, whether in money or in money's worth, and whether it is received by the landlord or by a person connected with the landlord. Illustrative figures show how quickly the cap bites. A landlord replaces a worn standard fridge-freezer, for which a comparable new model costs GBP 450, with a large American-style fridge-freezer costing GBP 1,300. Delivery and installation cost GBP 60 and removal of the old unit GBP 25, and the old unit is sold for GBP 30. The deduction is GBP 450, plus GBP 85 of incidental costs, less GBP 30, which is GBP 505. The remaining GBP 850 of the upgrade receives no income tax relief now or later. Part-exchange works slightly differently in form but produces the same result: HMRC's example is a new fridge at GBP 800 with GBP 300 allowed for the old one and GBP 500 paid in cash, and the deduction is GBP 500. The trade-in value is never itself deductible. Because the cap is measured against what a like-for-like item would have cost at the time, keep a note of a comparable model and its price when buying an upgrade. It is the only evidence of the figure that decides the deduction.
The first furnishing gets nothing
The relief requires an old item that the new one replaces, so the initial provision of anything is outside it. Furnishing a newly acquired let property, adding a dishwasher where there was none, or putting a second sofa in a larger living room produces no deduction under this section, and the capital allowances bar means there is none elsewhere either. This is the single largest source of wrong claims, and it has a practical consequence for record-keeping. The inventory prepared when a property is first let is not just a deposit protection document. It is the proof that an old item existed when the replacement is claimed five years later, so keep it with the tax records rather than with the tenancy file.
The property allowance and the cash basis
Individuals with modest rental income can take the GBP 1,000 property allowance instead of deducting actual expenses, but HMRC's guidance is clear that a landlord using the allowance cannot also deduct any allowable expenditure for the same year, including replacement of domestic items relief. It is a choice made year by year, so in a year when several items are replaced it is worth checking which way round produces the better answer. The cash basis, which is the default for most individual landlords with receipts up to GBP 150,000, does not change the relief. Cash basis landlords are barred from deducting capital expenditure on providing or altering an asset for use in a residential property, and the relief is written to apply in exactly that situation. Companies do not use the cash basis and cannot take the property allowance, but the relief itself is the same for them.
What to keep, and what to ask
Four records support every claim: the inventory showing the old item was provided, the invoice for the new one, a note of a like-for-like price where the new item is an upgrade, and a record of what happened to the old item and anything received for it, including by a family member. With those in place, three questions are worth putting to whoever prepares the accounts. Have any first-time purchases been claimed as replacements? Have fixtures such as boilers, radiators and sanitaryware been put through this relief, when they belong in repairs, or through repairs when the work was in truth an improvement? And where upgrades were bought, has the deduction been capped and has the old item's value been deducted? A landlord who replaces a few items a year will rarely find large sums at stake in any one of them. Across a portfolio and a decade, the difference between claiming correctly and claiming by habit is real money, and the correct figure is the one that survives an enquiry.
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This article is general information only and does not constitute tax advice. Figures and dates are current as at the date of writing; any worked example is illustrative. Always consult a qualified adviser before acting.