The Replacement of Domestic Items Relief allows landlords to claim tax relief when they replace movable furniture, furnishings, household appliances, and kitchenware in a rental property. This relief covers the cost of items such as free-standing wardrobes, curtains, carpets, televisions, fridges, and crockery.

Eligibility Conditions:

To qualify for this relief, the following four conditions must be met:

• Condition A: The individual or company claiming the relief must operate a property business that includes letting a dwelling-house.
• Condition B: An old domestic item provided for use in the dwelling-house must be replaced with a new domestic item. The new item must be for the exclusive use of the tenant in the dwelling-house, and the old item must no longer be available for use by the tenant.
• Condition C: The expenditure on the new item must not be prohibited by the wholly and exclusively rule but would otherwise be prohibited by the capital expenditure rule.
• Condition D: Capital Allowances must not have been claimed for the expenditure on the new domestic item.

If these conditions are satisfied, a deduction for the expenditure on the new item can be claimed.

Calculating the Deduction:

The amount of the deduction is calculated as follows:

• Cost of the New Item: The cost of the new replacement item, limited to the cost of an equivalent item if it represents an improvement over the old item (beyond a reasonable modern equivalent).
• Incidental Costs: The incidental costs of disposing of the old item or acquiring the replacement.
• Less Disposal Receipts: Any amounts received on disposal of the old item.

Example from HMRC Guidance:

HMRC provides an example to illustrate this relief. If you replace a five-year-old washing machine that originally cost £200 with a brand-new budget washing machine costing around £200, the new machine would not be considered an improvement over the old one, considering inflation.



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