RHI income

RHI income

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I understand that non domestic RHI income is taxable as received in business capacity.  What about the situation where the recipient of the income receives RHI for generation of electricity used in a farmhouse that is used 1/3rd for private purposes?  would we be able to not tax 1/3rd of the income?  http://www.hmrc.gov.uk/manuals/bimmanual/BIM40510.htm isn't really helpful.

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By pauld
28th May 2014 11:32

From the link you have provided

Do you just split on reasonable basis? the 1/3rd private income is either taxed as miscellaneous income or not at all depending on whether used for home or not use ,as per guidance in link.

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By mhtax
28th May 2014 11:47

Private income

I would have thought unless the power generated is far in xcess of the personal usage.

This principle follows many other items of expenditure examples such as repayment of loan capital where the loan is for mixed use and it is accepted capital pays off the non taxable first so you receive maximum tax relief.

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By Alastair Johnston
28th May 2014 12:38

Which RHI scheme?

Is the farmhouse on the commercial or domestic RHI scheme? 

There is no exemption for non-domestic RHI income, so it is taxable.  Not sure that the proposed exemption for domestic RHI income has been legislated yet.  Obviously it will depend on the wording of the statute, but I think it will simply be a matter of which RHI scheme you are on.

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By nautical
28th May 2014 13:08

The question is mixed up and wrong at the moment. You do not receive RHI for the generation of electricity.  For generation of electricity you receive FIT; for the generation of heat you receive RHI.  Which are we talking about here?

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By blok
29th May 2014 16:52

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the income is non domestic RHI, receivable from a biomass boiler installation.  the farmhouse is a typical one.  the boiler heats both the farmhouse and the outbuildings.  I understand that RHI (non domestic) is taxable to the extent that it is generated in a business capacity, I wondered if we could not tax the portion of the income tariff that relates to the heating of the private element of the farmhouse?

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