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Pay for advice
I am assuming you have paid the surveyors, etc. Is there a reason why you don't think paying for bespoke advice on the accounting aspects of this project is appropriate?
These sound like capital costs. Regardless of how unfair that seems to you, that is the part you need bespoke advice on. One piece of advice I will give you for free. Any plan that involves "presenting" the plan as something it isn't is extremely inadvisable.
Here is the original question before the OP deleted it.
Can I reclaim capital costs of a leasehold barn conversion, if it is part of a property development / letting business?Posted by dstart PM | on Sun, 10/04/2016 - 11:21 10 | report
We are thinking of acquiring a derelict barn on a peppercorn rent and 20 year lease. The deal is we have to rennovate the barn. We will invest ~£100k to rennovate it (new roof, floors, insulation, as well as conversion costs), and then earn 20 year's holiday letting rental income (maybe £15k per year). Can we offset the capital costs?
I know you cannot offset capital costs in normal furnished holiday letting (FHL), but in this case we don't own the barn and will not create any capital gains, so it seems unfair. The barn is our Plant and Machinary to run the business for 20 years.
There may be some exceptions for capital allowances for agricultural buildings, and we could rennovate it as an agricultural building first, albeit there is no farming income? I think the same capital allowances apply for commercial buildings too, and we could consider renting it out commercially instead of FHL.
Or should we present it as a property development, whereby the property is somehow sold back to the landlord at the end?
i.e. Is there a better way to structure this than just a straight FHL?
NB Someone mentioned some EU provision for Cornish agricultural property development too?
Thanks!
Daniel