Tx notes fa22 Final

Replacement Furniture relief
. There is NO relief for the initial cost 
of furniture and furnishings. There is ONLY relief when assets are replaced. This will include 
furnishings such as carpets and curtains, electrical equipment such as TV’s, fridges , freezers 
and washing machines and even cutlery and crockery.
(e)
The amount of relief is reduced by any proceeds from selling the old asset which has been 
replaced and relief is not given for any cost which represents an improvement, for example, if a 
fridge is replaced with a fridge freezer, only the cost of an equivalent fridge qualifies for relief.
(f)
Replacement furniture relief does not apply to furnished holiday lettings because the cost of 
furniture and furnishings in such properties qualifies for capital allowances (see Section 4 that 
follows).
(g)
Relief is available for revenue expenditure incurred before letting commenced, under the pre-
trading expenditure rules. ie expenditure incurred up to 7 years prior to renting is treated as 
being incurred on day one of the letting business.

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Example 2 
Sid owns a furnished property that is let out at an annual rent of £9,600, payable monthly in advance. 
During the year 2022/23 he made the following payments:
The tenant vacated the property during June 2022 without having paid the rent due for June. Sid was 
unable to trace the defaulting tenant, but managed to let the property to new tenants from 1 July 
2022.
Calculate the Property Income assessment for 2022/23.