I am trying to improve my knowledge of how to treat Furnished Holiday Lettings for tax and I would like to check that my understanding is correct on the following:
Maintenance - If it's a repair or replacement, it is revenue expenditure and therefore allowable. If its an upgrade, it is capital expenditure and is capitalized to the property.
Furniture and Furnishings - There's no "replacement basis", "renewals allowance" or "10% wear and tear" option for 14/15. If you spent less than £500,000 on them in 14/15, then the Annual Investment Allowance covers the cost completely. Above that and it's a capital allowance which you can write down at 18% pa etc (or special pool 8%).
Fixtures and Fittings - If individual items are not able to be classed as repairs, but are considered to be upgrades or additions, then they are capital expenditure and are capitalized to the property (or for capital allowances?)
Once a capital allowance pool balance gets below £1000 in value, it can be written off and claimed, rather than writing down.
