Capital allowances for self employed - property

Lippizanna Registered Posts: 6 New contributor ?
Could someone help me please as I have never dealt with this before. I have a client who is self employed. The information she has given me is a little vague but I understand that earlier this year she bought a bungalow with her husband and father in law. Part of the property is let out for residential and the other part has been converted for her to use for her business. Can she claim capital allowance for her portion of the property and what records of proof do I need that she owns that part of the property ? If it's proven that she has no ownership (i.e owned by husband and father in law) presumably she can't offset. Any advice would be appreciated


  • deborahcarpenter
    deborahcarpenter Registered Posts: 161 ? ? ?
    You cant claim capital allowances on buildings!!! ( only in very limited circumstances when buildings are converted into flats above business premises) Your client can claim for fixed assetts used for business use such as furniture and computers etc. but be careful to apportion for any personal use.
    She could claim a percentage of the interest on the mortgage but be aware that if she starts claiming excessive amounts of home use, capital gains tax may come into effect when the property is sold. She also needs to declare here, rental income for the other part of the bunaglow that is let out.
    Hope this helps.
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    CGT will come in to effect anyway - if one part is let and one part is converted for business then there is no residential aspect.
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