Replacement of Domestic Items Relief: A Complete Guide for UK Landlords

Replacement of Domestic Items Relief (often searched as simply domestic items relief) lets a UK landlord deduct the cost of replacing furniture, furnishings, appliances and kitchenware provided for a tenant's use in a let residential dwelling. It is the tax deduction for replacement items most residential landlords rely on, a revenue deduction against rental profit governed by ITTOIA 2005 s.311A for individuals and CTA 2009 s.250A for companies. It replaced the 10% wear and tear allowance from April 2016, and unlike that allowance it gives relief only when you actually replace something, never on the first time you provide an item.

This guide sets out the four statutory conditions, what does and does not qualify, the calculation done correctly (including the incidental-cost uplift most landlords miss), the like-for-like cap, the company route, the furnished holiday let position, and how the relief sits alongside Section 24. It is the deep-dive companion to our broader complete list of landlord tax deductions for 2026/27, which covers every expense category at a higher level and defers to this page for the full mechanics.

What Replacement of Domestic Items Relief Actually Is

Replacement of Domestic Items Relief is a deduction that turns what would otherwise be non-deductible capital spending (replacing a moveable item) into an allowable expense against rental profit. Without it, the cost of a replacement sofa or fridge would be blocked by the capital expenditure rule. The relief specifically overrides that bar for genuine replacements of domestic items.

Two points correct the most common misconceptions:

• It is residential only. The relief applies to a property business carried on in relation to land that consists of or includes a dwelling-house let as a dwelling-house. Commercial and mixed-use lettings do not qualify. Anyone telling you the relief covers commercial furnished lettings is repeating an old error.
• The property does not have to be let furnished. s.311A imposes no furnished requirement. It applies whenever you replace a domestic item that was provided for the tenant's use. An unfurnished let where the landlord still supplies white goods, carpets or curtains can claim on replacement of those provided items. The furnished-only idea is a leftover from the repealed wear and tear allowance, which did require furnished status.

The HMRC replacement of domestic items guidance is set out in its Property Income Manual at PIM3210, which is the authoritative reference for the conditions, the incidental-cost rule and the like-for-like test discussed below. If you are looking for the official position, that manual page plus the statute itself is what an inspector works from.

The Four Conditions for the Relief (ITTOIA 2005 s.311A)

The relief is only available when all four statutory conditions are met. Reading them in order is the cleanest way to test any claim.

Condition	What it requires
Condition A	You carry on a property business in relation to land that consists of or includes a dwelling-house. In short, a residential let. Commercial property and furnished holiday lettings are outside this.
Condition B	An old domestic item was provided for the tenant's use, you incur expenditure on a new domestic item solely for the tenant's use, the new item replaces the old item, and the old item is no longer available for use in the dwelling.
Condition C	The expenditure is not blocked by the wholly and exclusively rule but would otherwise be blocked by the capital expenditure rule. This is the bar the relief exists to override.
Condition D	No capital allowance under CAA 2001 may be claimed on the expenditure. You cannot double up the relief with capital allowances on the same item.

Condition B carries the most weight in practice. It builds in the two defining features of the relief: it is a replacement (no relief on first provision), and the old item must genuinely leave the dwelling (sold, scrapped, given away or moved out), not simply be shuffled into a cupboard. The relief is also denied where rent-a-room relief has been claimed on the same accommodation.

What Qualifies and What Does Not

A "domestic item" is an item for domestic use such as furniture, furnishings, household appliances and kitchenware. The statute expressly excludes fixtures. The practical line is whether the item is loose and moveable or part of the fabric of the building.

Qualifying domestic items typically include:

• Furniture: sofas, armchairs, beds and mattresses, wardrobes, chests of drawers, dining tables and chairs, desks
• Furnishings: curtains, blinds, carpets, rugs, soft furnishings
• Household appliances: washing machines, fridges and freezers, dishwashers, tumble dryers, free-standing cookers, televisions
• Kitchenware: crockery, cutlery, pans, kettles, toasters, microwaves

What does not qualify because it is a fixture or part of the building:

• Boilers and water-filled radiators that are part of the central heating system (specifically excluded by the statute)
• Fitted kitchens and fitted bathroom suites
• Built-in wardrobes and other built-in furniture
• Doors, windows, fixed flooring such as floorboards and tiling, and the structure generally

When you replace a fixture, you are not in s.311A territory at all. The cost is judged on the repairs versus improvements test (capital versus revenue expenditure). A like-for-like repair to a fixture is usually a deductible revenue cost, while an upgrade is capital. Getting that boundary right matters as much as the replacement relief itself, because the two rules cover different parts of the same refurbishment.

How the Relief Is Calculated, Correctly

Most guides reduce the calculation to "cost of the new item, less proceeds of the old one". That understates the claim, because it ignores the incidental-cost uplift built into the statute. The full formula is:

Relief = cost of the new item (capped at a like-for-like replacement) + incidental costs of buying and installing the new item + incidental costs of disposing of the old item − any proceeds or part-exchange value received for the old item.

The incidental costs are real money landlords routinely forget to claim. HMRC's PIM3210 confirms the deduction is increased by incidental capital expenditure on the disposal of the old item or the purchase of the new one, and gives delivery, installation and disposal as examples. So the cost of getting the old fridge taken away, the delivery charge on the new one, and the plumber's fee to fit a new washing machine can all be added to the claim.

Like-for-Like and the Improvement Cap

The relief is generous about replacements but firm about upgrades. If the new item is substantially the same as the old one, you deduct the full cost. If it is not, the deduction is capped at what a substantially similar replacement would have cost, and the excess (the improvement element) is disallowed.

The key point HMRC makes is that newness alone is not an improvement. Its own example: a brand new budget washing machine costing around £200 is not an improvement over a five-year-old machine that cost around £200 when it was bought. Normal modern equivalents are accepted, so replacing an old standard-definition television with a comparable modern one, or a basic washing machine with a current basic model, is a straight like-for-like claim.

Where the cap bites is genuine upgrading. Suppose a worn budget washing machine fails and you replace it with a high-end model. If an equivalent basic replacement would have cost around £250 but you spend £700 on the upgraded machine, you can claim £250. The £450 improvement element is not relieved under s.311A. The same logic applies to swapping a small basic sofa for a large premium suite, or a standard carpet for a luxury one.

Worked Examples (with Incidental Costs)

The following examples use anonymised landlord scenarios and apply the full formula, including the incidental-cost uplift and the netting of any proceeds.

Example 1: Straight replacement with delivery and disposal

A landlord replaces a broken washing machine in a let flat. The new machine costs £380. Delivery and installation cost £40, and the old machine is collected for disposal at a cost of £20. The old machine has no resale value.

Relief = £380 + £40 + £20 = £440. A cost-only calculation would have stopped at £380 and missed £60 of genuine relief.

Example 2: Upgrade hitting the like-for-like cap

A landlord replaces a basic three-seater sofa that has worn out. Rather than buy an equivalent, they choose a premium suite costing £1,400. A like-for-like basic replacement would have cost about £600. Delivery of the new suite is £50, and removal of the old one is £25.

The relief is capped at the like-for-like cost. Relief = £600 + £50 + £25 = £675. The £800 upgrade element is disallowed.

Example 3: Part-exchange

A landlord replaces a fridge-freezer. The new appliance costs £550. The retailer gives a £90 part-exchange allowance on the old unit, and there is a £30 delivery and installation charge.

Relief = £550 + £30 − £90 = £490.

Example 4: Void-period refurbishment of a let HMO room

A landlord running a licensed house in multiple occupation refurbishes one room between tenancies. They replace a bed and mattress (£260, plus £15 disposal of the old bed), a worn desk and chair (£140, old set sold for £20), and the room's carpet (£180, plus £35 to lift and dispose of the old carpet).

Relief = (£260 + £15) + (£140 − £20) + (£180 + £35) = £275 + £120 + £215 = £610. Each line nets proceeds and adds the relevant incidental costs.

Replacement of Domestic Items Relief for Companies (CTA 2009 s.250A)

Landlords holding residential property through a company claim the equivalent relief under CTA 2009 s.250A. The four conditions mirror the individual rules, and the calculation, like-for-like cap and incidental-cost uplift all work the same way.

The difference is where the deduction lands. A company deducts the relief against its profits before corporation tax, so the cash value tracks the company's marginal corporation tax rate (which depends on profit level, from the small profits rate up through the marginal band to the main rate) rather than an income tax rate. We do not quote a single percentage because the rate is profit-band dependent. Note also that subsection (7), the old furnished holiday let carve-out, was omitted for accounting periods beginning on or after 1 April 2025 following FHL abolition, so it no longer appears in the live company provision.

Whether to hold property personally or in a company turns on far more than this single relief, including leverage, marginal rates, profit extraction and Section 24 exposure. Our complete guide to the buy-to-let limited company covers that decision in full.

The Furnished Holiday Let Exclusion and the Former-FHL Transition

Replacement of Domestic Items Relief does not apply to a furnished holiday letting. The reason is structural: an FHL was treated as a trade rather than an ordinary property business, so Condition A (a dwelling-house let as a dwelling-house within a property business) was not satisfied. FHL owners instead relied on capital allowances on plant and machinery, including furniture and appliances.

That changed when the FHL regime was abolished from 6 April 2025 for income tax (1 April 2025 for corporation tax). A property that used to qualify as an FHL but is now let as an ordinary residential dwelling falls under the standard property business rules from that date. From then on, replacing a domestic item in it is a Replacement of Domestic Items Relief question like any other residential let, and the old capital allowances route on domestic items closes. If you owned a former holiday let, our guide to the abolition of the furnished holiday lettings regime walks through the wider transition.

How This Relief Compares to the Old Wear and Tear Allowance

Before April 2016, landlords of fully furnished residential property could claim a wear and tear allowance of 10% of net rent, automatically, whether or not they replaced anything. Finance Act 2016 abolished that allowance and introduced s.311A in its place from April 2016.

Old wear and tear allowance (to April 2016)	Replacement of Domestic Items Relief (from April 2016)
Flat 10% of net rent, claimed automatically	Actual cost of genuine replacements only
Only for fully furnished lets	Any residential let where a provided item is replaced, furnished or not
No receipts required	Receipts and disposal evidence required
Claimed even with no replacements	Only when items are actually replaced

The shift rewards landlords who keep good records and actively maintain a property, and it removed the automatic relief that fully furnished lets used to enjoy in quiet years. In a year with significant replacement spend the new relief is often more generous than the old 10% would have been. In a quiet year it gives nothing, which is why timing and record keeping now matter.

Why the Relief Is Valuable Alongside Section 24

Replacement of Domestic Items Relief is an ordinary deduction from rental profit. That means it reduces taxable profit before the Section 24 finance cost restriction applies, and it relieves at your full marginal rate.

Contrast that with mortgage interest. Under Section 24, an individual landlord no longer deducts finance costs as an expense. Instead they receive a basic-rate tax reducer. A higher-rate or additional-rate landlord therefore gets only basic-rate value from mortgage interest, but full-marginal-rate value from a qualifying replacement. Pound for pound, the replacement relief is worth more to a higher-rate landlord than finance costs are. That is the single most useful planning point on this page: where a replacement is genuinely needed, the relief is one of the few deductions still working at full value after Section 24.

Record Keeping and Making Tax Digital

A Replacement of Domestic Items Relief claim is only as strong as its evidence. HMRC can ask you to support a claim during an enquiry, so keep:

• Purchase receipts or invoices for both the old item (where available) and the new one
• Evidence of disposal: a sale receipt, part-exchange note, charity donation confirmation or waste-removal invoice
• An inventory showing what was provided when the property was first let, so a replacement is distinguishable from a first provision
• Dated photos of the old item's condition where the replacement might look like an upgrade
• The incidental costs (delivery, installation, disposal) on the same invoices or as separate receipts

This discipline matters more from April 2026, when Making Tax Digital for Income Tax begins. The mandate phases in by qualifying income: from 6 April 2026 for landlords and sole traders with qualifying income over £50,000, from 6 April 2027 above £30,000, and from 6 April 2028 above £20,000. Those in scope must keep digital records and file quarterly updates, so storing receipts and invoices in compatible software from the outset makes a replacement claim simple to evidence and to link to the right property.

Common Mistakes to Avoid

• Claiming a first provision as a replacement. Furnishing or equipping a property for the first time is capital, not a replacement. The relief only starts on the second item.
• Forgetting the incidental costs. Delivery, installation and disposal are addable to the claim and are routinely missed, which understates relief.
• Claiming the full cost of an upgrade. If you genuinely improve, you are capped at the like-for-like cost; the improvement element is disallowed.
• Not netting proceeds. Any sale or part-exchange value for the old item reduces the claim, however small.
• Treating fixtures as domestic items. Boilers, fitted kitchens and bathroom suites are not within the relief; they go through the repairs versus improvements test.
• Assuming furnished status is required. It is not. A provided item in an unfurnished let still qualifies on replacement.

Looking Ahead: April 2027 and Beyond

The relief itself is not changing. What is changing is the tax it relieves against. From 6 April 2027, Finance Act 2026 (which received Royal Assent on 18 March 2026) introduces separate rates of income tax on property income for England, Wales and Northern Ireland: 22% basic, 42% higher and 47% additional. The Section 24 finance cost reducer rises in step from 20% to 22%. There is no new wedge for basic-rate landlords, and Scotland sets its own income tax rates for Scottish taxpayers.

Because Replacement of Domestic Items Relief reduces profit before those rates and before Section 24, it remains a full-marginal-rate deduction throughout. If anything, a higher headline rate makes capturing every pound of genuine replacement relief, including the incidental costs, slightly more valuable. For the full picture on the new rates, see our guide to the UK property investment tax landscape for 2026.

Getting It Right

Replacement of Domestic Items Relief is straightforward in principle and fiddly in practice. The judgment calls (replacement versus first provision, like-for-like versus improvement, domestic item versus fixture, and which incidental costs belong in the claim) are exactly where landlords lose relief or invite an enquiry. Specialist input tends to pay for itself where you have:

• Multiple furnished or part-furnished properties with frequent replacements
• High-value items where the like-for-like cap is in play
• A refurbishment that mixes domestic items, fixture repairs and improvements in one project
• A former furnished holiday let now let as an ordinary residential dwelling
• A company structure where the relief runs through corporation tax instead

If you want a second pair of eyes on how a relief like this fits your wider position, a specialist property accountant can review your replacement spend and allocate it correctly. The form below routes through to the team that handles this work.