Replacement of Domestic Items Relief, explained

Replacement of Domestic Items Relief is set out in ITTOIA 2005 s311B and explained in HMRC’s Property Income Manual at PIM3210 and PIM3215. It is the post-2016 successor to the old Wear and Tear Allowance, and it is the only mechanism by which a landlord of a residential let can deduct the cost of a sofa, fridge, washing machine, carpet or similar item provided for the tenant’s use. It is not optional and it is not generous. The relief has four moving parts that have to line up — the item, the replacement, the cap, and the disposal — and a return that misses any one of them either over- or under-claims.

The statutory mechanic, in plain English

Section 311B allows a deduction, when computing the profits of a property business, equal to the cost of a replacement domestic item provided for use in a dwelling-house that is let. The deduction is not given for the original purchase. It is given the first time the original is replaced, and on every subsequent replacement after that.

The four statutory conditions in s311B(2)–(6) are:

• the business is a property business carried on by a person other than a relevant intermediary (so excluded letting, such as furnished holiday lettings up to 5 April 2025 and rent-a-room, falls outside);
• an old domestic item has been provided for use in a dwelling-house, and is replaced with a new one solely for the tenant’s use;
• the new item is made available for the tenant’s use and the old item is no longer available for use in the dwelling-house;
• any proceeds from disposing of the old item, and any portion of the new item’s cost representing an improvement, reduce the deductible amount.

The third condition is the one that catches most clients out. You cannot keep the old fridge in the garage as a spare and claim relief on the new one. The old item has to go.

What qualifies as a “domestic item”

PIM3215 lists the four classes of domestic item that fall within s311B(7):

• movable furniture — beds, sofas, wardrobes, tables, chairs, free-standing bookcases;
• furnishings — curtains, blinds, linen, carpets, floor coverings;
• household appliances — fridges, freezers, washing machines, dishwashers, tumble dryers, free-standing cookers, microwaves;
• kitchenware — crockery, cutlery, pots and pans.

The line that separates these from items that don’t qualify is whether the item is part of the fabric of the property. Anything that is fixed — a fitted kitchen, a bathroom suite, a boiler, fitted wardrobes, a bath, a basin, a toilet — is not a domestic item. Replacing one of those is a separate question (repair vs improvement under ordinary allowable-expense principles), and the deduction, if any, comes through the repairs-and-renewals route, not through s311B.

Fitted kitchens — the classic trap

Replacing a like-for-like fitted kitchen — same layout, same spec, units swapped because they are at end of life — is a repair to the property and deductible as such under the general PIM2030 principles. Replacing a basic fitted kitchen with a higher-spec one with more units and a quartz worktop is an improvement and capital. Free-standing cookers, microwaves and fridges are different — they’re domestic items, and if you replace one with a like-for-like equivalent, s311B is your route. The two regimes don’t overlap and don’t blur into each other; the test is whether the item is fixed to the building.

The initial purchase is never deductible

PIM3210 is explicit: “The initial cost of furnishing a dwelling-house is not an allowable expense.” When a client buys their first sofa for a flat they are letting out, that sofa is capital. There is no deduction in the year of purchase, no capital allowance route for residential lets (since the abolition of fixtures allowances on dwellings), and no deferred basis pool to recover it against future profit. The cost is simply not relieved against income at all.

The relief kicks in only on the first replacement of that sofa, and then again on every subsequent replacement. For a long-let portfolio, the practical effect is a phased build-up: in the first year or two of a furnished let, the landlord is buying capital items they can’t deduct; from year three or four onwards, as items wear out, replacement deductions start to flow.

The like-for-like cap

The deductible amount is the cost of the new item, capped at the cost of an equivalent that is substantially the same as the old. Any excess — representing an improvement — is not deductible (and is not relieved elsewhere; it is simply lost as a revenue deduction).PIM3210 illustrates this with a washing machine and a washer-dryer: if the old machine was a washing machine and the replacement is a washer-dryer, the deduction is restricted to the cost of a like-for-like washing machine.

The cap is judged on the new item’s function, not its price tier. A £400 budget fridge replaced with a £700 fridge of the same broad type — equivalent capacity, equivalent features, just a newer model — is not restricted; the entire £700 is deductible, because the £700 is what a substantially equivalent item now costs. Restriction bites when the replacement is a genuine upgrade in functionality, not when the replacement is just newer.

Worked example: microwave replaced with a built-in oven

A landlord’s flat had a free-standing £200 microwave on the worktop. The microwave breaks. The landlord takes the opportunity to install a £900 built-in single oven in a new cabinet, removes the microwave, and skips the old unit.

The replacement deduction under s311B is capped at the cost of a substantially equivalent microwave. Suppose a like-for-like microwave today costs £220. The £220 is deductible against rental profit. The remaining £680 is treated as an improvement and is not deductible in the year — it is also not available as a domestic item deduction later (the next replacement starts from the £900 oven base, not the £220 microwave base).

If the oven is later treated by HMRC as having become part of the fitted kitchen — fixed in a cabinet, integrated, sold with the property — then on a future replacement the route is the repair-vs-improvement analysis on the kitchen, not s311B at all. This is one of the awkward boundary cases; documenting how the oven sits in the property at the point of installation matters.

Proceeds from the old item reduce the claim

If the landlord sells the old item — eBay, gumtree, a second-hand dealer — the proceeds reduce the deductible amount. So a £500 sofa replacement, with £80 of proceeds from selling the old sofa, gives a deduction of £420. If the old sofa was simply taken to the tip, the deduction is the full £500 (after any cap). The disposal-proceeds rule is in s311B(4)–(5) and PIM3210; the deduction is on the net cost the landlord actually bore.

The “must be removed from the let” condition

Section 311B(3)(c) is unambiguous: the deduction is available only if the old item is no longer available for use in the dwelling-house. If the landlord buys a second sofa and leaves the old one in the property — even unused, even in a back room — no relief is available on the new sofa, because the old one has not been replaced; it has merely been supplemented. Adding furniture to a previously unfurnished let, or adding a second of something, is provision, not replacement, and provision is capital.

In practice, this is the condition reviewers should always spot-check on furnished lets. Ask the client whether the old item was disposed of (skip, eBay, dealer take-back) and keep a one-line note on the workpaper. It is also the condition that distinguishes Replacement of Domestic Items Relief from the old, abolished “renewals basis” — under the new regime, you have to actually replace, not just refresh.

What this looks like on a return

On the property pages of an SA105 (or the equivalent on a quarterly MTD ITSA submission), domestic-items replacements go in the other allowable property expenses box, not in repairs. They sit alongside, but separately from, repair-and-renewal deductions claimed under PIM2030. Reviewers should expect to see, per item: a date, a description of the old item and the new item, the gross cost, any disposal proceeds, any like-for-like cap applied, and a short note confirming the old item was removed from the let. For a multi-property portfolio the records have to be per-property — the relief is per dwelling, not per landlord.

One last detail worth keeping front of mind: s311B applies to a property business. Furnished holiday lettings — to the extent they survived the abolition of the regime from 6 April 2025 — were historically outside s311B because FHLs had their own capital allowances route. From 2025/26 onwards, the simpler position is that all UK residential letting follows s311B for moveable items andPIM2030 for fixed items.