Replaced sofa - tax treatment

Hello all,

I rent an apartment.

Between lettings I needed to replace sofa.

How is this expense treated from a tax perspective. Can I include the cost under "repairs" and subtract from profit or is this incorrect?

Thank you.

How have you treated furniture & fittings before? If you have already claimed wear & tear allowance on them at 12.5% per year, then you should do the same with the sofa.

If you haven't claimed any wear & tear allowance, you have a choice, to either claim it at 12.5% per year on the cost of furniture & fittings, including the sofa, or to claim in full the cost of replacing furniture & fittings. If you opt for the latter, you can claim in full for replacing the sofa, but you can't claim anything when you first provide an item, only for replacements.

Whichever you choose, you will have to follow the same choice for subsequent years, i.e. you can't claim wear & tear at 12.5% on year and the full cost of replacements another year.

Greta said:

If you haven't claimed any wear & tear allowance, you have a choice, to either claim it at 12.5% per year on the cost of furniture & fittings, including the sofa, or to claim in full the cost of replacing furniture & fittings. If you opt for the latter, you can claim in full for replacing the sofa, but you can't claim anything when you first provide an item, only for replacements.

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According to the tax consultant I spoke with, there is no choice.

Furniture and fittings can only be claimed at 12.5% per annum over 8 years.

According to him, if your sofa needs to be replaced after year 3, for example, the balance / remaining value of the sofa can be written off and the value of the new sofa has to be added in to the inventory and written down again at 12.5% per annum.

Delgirl, thanks for the info, I may have mixed it up with the UK tax rules.

I depreciate the furniture & fittings in my Irish property at 12.5% per annum, but didn't know I could write off the remaining amount for, say, a sofa, straight away, if it is replaced.

Hello all,

Thanks for the information.

If someone could confirm if the following is correct I would be very grateful.

I started to rent an apartment 4 yrs ago and installed a sofa which cost EUR1000.

I have been claiming capital allowance on this at 12.5% per annum so the sofa now has a residual book value of EUR500.

During a change of tenenats the sofa was found to be not fit for ongoing use so I replaced it at a cost of EUR2000.

From this year on I can claim 12.5% of the EUR2000 new sofa and can write down the EUR500 residual value from the old sofa.

Is this correct?

Thank you.

Yes, if the sofa was scrapped. If you received any amount in respect of the sofa, that would change the matter.