Question re capital expenditure

Sarah-Lou
Sarah-Lou Registered Posts: 141 ? ? ?
My brain has gone blank! Client has converted a dilapidated barn at her property into a usable working space for her business. I am right in thinking that all conversion works are capital and therefore quality for capital allowances? But no AEA as that doesn't cover it?

Just had a quick look on HMRC and couldn't really find what I wanted.

Thank you

Sarah-Lou

Comments

  • KernowAccountant
    KernowAccountant Registered Posts: 103 ? ? ?
    Sarah-Lou wrote: »
    My brain has gone blank! Client has converted a dilapidated barn at her property into a usable working space for her business. I am right in thinking that all conversion works are capital and therefore quality for capital allowances? But no AEA as that doesn't cover it?

    Just had a quick look on HMRC and couldn't really find what I wanted.

    Thank you

    Sarah-Lou

    What's "AEA"?
  • Sarah-Lou
    Sarah-Lou Registered Posts: 141 ? ? ?
    Annual Exemption Allowance :001_smile:
  • KernowAccountant
    KernowAccountant Registered Posts: 103 ? ? ?
    Sarah-Lou wrote: »
    Annual Exemption Allowance :001_smile:

    Curiosity is getting the better of me - what's that?
  • BeccaLouJ9
    BeccaLouJ9 FMAAT Posts: 896 Regular contributor ⭐ ? ⭐
    Do you mean AIA-Annual Investment Allowance?? What's AEA? I'm intrigued too!! :)

    Are you confusing it with Annual Exempt Amount for CGT?

    B x
  • jamesm96
    jamesm96 Registered Posts: 523
    Sarah-Lou wrote: »
    My brain has gone blank! Client has converted a dilapidated barn at her property into a usable working space for her business. I am right in thinking that all conversion works are capital and therefore quality for capital allowances? But no AEA as that doesn't cover it?

    Just had a quick look on HMRC and couldn't really find what I wanted.

    Thank you

    Sarah-Lou

    Hi Sarah-Lou,

    It's capital alright, but no Capital Allowances; you don't usually get those on 'Land and Buildings' (i.e. the setting in which you carry on your business), you get them on 'Plant and Machinery' (assets which perform a function within your business). But you can claim CAs for certain integral features, as listed on HMRC's website here.

    As an aside, if it's an industrial building, then it might qualify for Industrial Building Allowances in place of Capital Allowances, but it doesn't sound like we're talking about a factory / warehouse here.

    Hope that helps,

    Mike.
  • Sarah-Lou
    Sarah-Lou Registered Posts: 141 ? ? ?
    Argh yes I meant AIA. I tell you, the sooner I can quit my 'day job' and do this full time the better. Yes, I meant annual investment allowance. Heaven knows where I got AEA from and yes that is capital gains lol.

    Thank you Mike that is really helpful :001_smile:

    Sarah-Lou
  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    Just remember capital gains as a business asset when selling.
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