SA - capital allowances and expenses for new build extension

Hi

I have a client who is a freelance therapist. He has bought a new house for him and his family, knocked down the old garage, and built single-storey 2-roomed consulting practice with seperate front door for the business. It's pretty small-scale and straightforward except;

Just a couple of questions which I am reading conflicting advice -

can he claim back specifically council tax and mortgage interest (he has an interest only mortgage) - obviously only for the proportion of the business premises. Some reference books/websites say yes, some say no. (they all agree on utility bills etc)

RE. Capital allowances. I understand he cannot claim back any capital allowances on the new build, but the following seem to be "under discussion"-

small kitchen for sole business use - some references suggest CA could be claimed, or is this for refurb only?
Wall radiators (as opposed to free standing electric radiators) - as above
Carpets - I don't think I can capitalise, but am I allowed to expense, or again is this just for refurbs?

Apologies for long-windedness, but am drowning in (conflicting) information


Thanks for any help offered, and any recommendations for good reading material would be much appreciated,

Comments

  • stevo5678
    stevo5678 Registered Posts: 325
    hi

    i have a client who is a freelance therapist. He has bought a new house for him and his family, knocked down the old garage, and built single-storey 2-roomed consulting practice with seperate front door for the business. It's pretty small-scale and straightforward except;

    just a couple of questions which i am reading conflicting advice -

    can he claim back specifically council tax and mortgage interest (he has an interest only mortgage) - obviously only for the proportion of the business premises. Some reference books/websites say yes, some say no. (they all agree on utility bills etc)

    S: i think this all sounds ok

    re. Capital allowances. I understand he cannot claim back any capital allowances on the new build, but the following seem to be "under discussion"-

    small kitchen for sole business use - some references suggest ca could be claimed, or is this for refurb only?

    S: An informal rule i've come across is you may be able to claim for anything that would 'fallout' if you turned the property upside down and shaked it!

    S: Kitchen i'd say no.

    Wall radiators (as opposed to free standing electric radiators) - as above


    carpets - i don't think i can capitalise, but am i allowed to expense, or again is this just for refurbs?

    S: Although it contradicts my informal rule i'd say yes as this would need renewing on a fairly regular basis

    apologies for long-windedness, but am drowning in (conflicting) information


    thanks for any help offered, and any recommendations for good reading material would be much appreciated,

    S: These sort of costs are always up for discussion but anything that add's value to the property in terms of resale i would say is capital gains related and no allowances allowed.
  • scribes
    scribes Registered Posts: 4 New contributor ?
    Remember if you claim mortgage interest you could open yourself up to a capital gain (if houses ever go up any more) on the business part of the house if they ever sell.
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    scribes wrote: »
    Remember if you claim mortgage interest you could open yourself up to a capital gain (if houses ever go up any more) on the business part of the house if they ever sell.

    Given that part of the home is used for business that part no longer qualifies for PPR and therefore, to me at least, it is irrelevant whether or not mortgage interest is being claimed (S.224, TCGA 1992).
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    stevo5678 wrote: »
    S: These sort of costs are always up for discussion but anything that add's value to the property in terms of resale i would say is capital gains related and no allowances allowed.

    I would agree with all this.
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