Client has bought a Caravan to let on Haven site Nov 12. Site is shut for winter. First tax year the rentals are received is 2013/14.
I have conflicting advice from two HMRC inspectors and also a firm of Chartered accountants in Wales, who specialise in caravan lettings.
Year one (2012/13) nothing put on return as not income generated (although asset was bought in this tax year.
Year two (2013/14) they have let through Haven.
Year three (2014/15) they have let through Haven.
Question is capital allowances on the Van
Two lots of advice given
1) can put the let as a FL (instead of an FHL), and sideways claim CA's against any other income
2) can put the let as a FHL (if qualifies - or do a election for grace period to declare in 13/14)
3) can claim AIA's (but can this only be done in the tax year they bought the asset ie 12/13)
4) can claim CA's (either as an FHL against rentals of this only) or (FL against any other income)
Can anyone advise on this - seems to be a loophole. My client has enough income to cover the full van AIA in 12/13 & 13/14.
In 14/15 has no taxable income as is now retired. So consequently all CA relief would be unused.
And rentals of Van will barely ever make a profit after Haven take their big annual site fee out.
Time is ticking for me to resubmit the 12/13 if I can claim full AIA's relief against his taxable income under the FL rules.
Any help would be much appreciated