I have what may seema very stright forward question but I'm just doubting myself on the answer now!
A new client of mine bought last year a cattery including a house (for one price). The house is their PPR. They took out a loan to help fund this purchase. What I guess is the straightforward question is that surely a proportion of the loan interest could be claimable against the income?
My concern is that nothing has been capitalised in the cattery accounts by the old accountants for the purchase of the cattery but presumably they couldn't claim it all as PPR upon a sale?. I need to find further information form the client, but any helpful adivce in the meantime would be greatly appreciated.
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Thanks
Many thanks for that - that's what I thought but as it hadn't been done by the previous accountant it made me question myself!
Claim a proportion
You can claim the interest, but the proportion relating to the cattery value, so need a calculation based on the value splits at time of purchase. I had interest queried by revenue in similar situation but when I gave them a calculation based on values of private and business element, the interest claimed was allowed.
On disposal, part PPR and part under capital gains.
Job Related Accommodation?
Hi All
Sorry to bring up an old question but it seems quite relevant to a client's accounts I'm currently working on.
Client is in the same situation as above, bought a cattery and house as one purchase (with the house, goodwill and F&F split out cost wise) and has taken out a loan to pay for it. Initially I was thinking along the same lines as above, apportion the interest and don't show the property in the accounts.
However, a second chain of thought came along, can 100% of the interest be claimed because (as I understand from the client) they have to live 'on site' to look after the cats 24/7 and therefore the house if effectively job related accommodation so 100% of the interest can be claimed?
Could this then be pushed further and a claim be put through the accounts for council tax, rates, bills etc of the house under the same principle, it's job related accommodation so is effectively 100% business related?
Downside to this could be that PPR could be restricted on the house if it's treated as business? There is likely to be a large CG upon sale of the house so I want to ensure PPR is there for the house when sold.
Any help on this would be appreciated.
Martin