Hi everyone, I have a new self employed client who's form of income is rental income......he rents some units / old stables that are on his dad's land and pays him a small amount each month for them, my client then rents them out to his own customers as storage space, he also rents containers that he leases from a supplier. In 2013/14 tax year he purchased a new steel building for approx. £14,000 as additional rental storage space and I'm not sure how to handle this in the accounts, do I claim the IBA allowance each year or can I claim capital allowance for the full amount as its not a fixed building ........... Thank you. |
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Accounts treatment should be straightforward
Tangible fixed asset.
As for the tax treatment, you need to consider whether it qualifies as plant. I suspect not, though there may be some fixed plant within it (lighting, heating etc) on which allowances can be claimed. I suspect, though, that it's little more than a shell. Is it easily moveable?
You need
To determine exactly what your client bought. Is it a metal container? Is it a building made of metal? Until you know what it is, it is difficult to form a view as to whether it will qualify as P&M. As far as the depreciation rate is concerned you need to be able to come to some reasonable assumption as to its likely lifespan. Real buildings made from bricks and mortar are often depreciated over 50 years but I doubt that rate will be reasonable for a steel building that will undoubtedly have a far lesser anticipated lifespan.
I think you've got it, Lisa1968
You've said more than once that it's a building.
So it's more than likely that it's a building, not plant.
But - as BKD said - it may well have plant in it.