From last month (April 2013) the renewals allowance for the replacement of plant other than trade tools will no longer be available.
For residential rental properties the renewals basis gives a specific deduction for expenditure on replacement of fixtures integral to buildings (e.g. bathroom fittings, central heating, boilers, windows etc). The relief is commonly used by landlords of residential accommodation, who are generally not entitled to claim capital allowances on the cost of plant and machinery.
Although there are some exceptions, generally where a property is let furnished landlords have previously been able to choose between the renewals basis or the 10% ‘wear and tear allowance’ (a 10% allowance based on net rental income, intended to give a form of relief in respect of depreciation of plant and fixtures). Landlords of unfurnished properties have only been able to obtain a tax deduction using the renewals basis and therefore ill be most affected by the change.