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Post Info TOPIC: Purchase of furniture for rental properties
Reza


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Purchase of furniture for rental properties
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Hi everyone,

I have just started doing accounts on Quickbooks Pro for a friend who has a portfolio of rental properties.

He has given me some receipts for purchase of furniture and appliances which he has paid for from the business account. 

He has also told me that he can not claim such expenses, but he can claim 10% towards wear & tear on the total rental income.

Where do I enter these purchases?

Your reply will be very much appreciated.



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gbm


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Drawings?

If he's claiming W&T allowance, he can't also claim when he buys new stuff, so they must be private.

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Reza


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Hi Nick,

Thank you for your reply. It is very much appreciated.

Kind Regards

reza



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Count1314


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This doesn't sound right! There is a wear and tear allowance on the asset and so any additional relevant expenditure would be ignored for tax purposes...but still included in the accounts???? At the very least, the items you mention could be capitalised....i.e., increasing the value of the relevant properties. Even if it was repairs/maintenance (which would indeed be covered in the 10% wear and tear allowance), the actual spend should be included in the accounts....surely not as drawings????



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Reza


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Hi,
Thank you for your reply.
The repairs and maintenance are definitely not included in the 10% wear & tear, I know this for sure because I have looked at the clients accounts for the previous years prepared by chartered accountants.
With regards to purchases of furniture they can not be  included in the expenses and  the total can only be included in the 10% allowance for wear & tear. My question is the total amount spent on furniture exceeds the 10% wear & tear allowance and I need to know where to enter this figure?
Many thanks.
Reza




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gbm


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Of course Rachael, thanks for that - was thinking from the tax perspective, where they would not attract tax relief (assuming W&T).



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Nick

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