Most landlords disregard capital allowances because the law says you cannot claim these allowances for furniture and fittings used in a let residential property. You would normally claim a 10% ‘wear and tear’ allowance in lieu of the cost of these items. However you are allowed to claim capital allowances for equipment used to run your lettings business and maintain the properties.

So what can you claim? It depends on whether you are responsible for the maintenance or if you outsource this function to the letting agent. Office equipment used predominately for your letting business can qualify, as can a vehicle used for travelling between the properties and for moving furniture etc. If the properties have gardens, tools such as lawnmowers and hedge trimmers will qualify. External maintenance such as painting and

Capital allowances are normally given at the rate of 25% of the remaining cost per year, but in the year of purchase you can claim at least 40% of the cost. For one year only from April 2004 small businesses can claim 50% of the cost of qualifying equipment in the first year. Small businesses are those with turnover of up to £5.6 million.