Tax treatment of converting director's garage to an office
Suppose ABC Ltd (not the real name) pays to have a garage at a domestic property (which is jointly owned by Mr and Mrs Smith) converted to habitable space which will then be used exclusively by the company for business purposes as a home office. Mr Smith is the sole shareholder and director of the company.
The company will not pay rent to Mr and Mrs Smith and will not claim any of the household expenses against its profits.
How does the payment for the conversion by the company affect the subsequent CGT due on the sale of the house and is there a charge to income tax on the cost of the conversion on Mr and Mrs Smith? Might there be a benefit-in-kind charge?
How is the payment treated in the accounts of ABC Ltd? Could it qualify for relief under the annual investment allowance?
Or is it all too complicated and should Mr Smith just pay for the conversion out of his dividend income from ABC Ltd.
- Shutting down a company with creditors 1,463 31
- Is this fraud? 292 5
- Saying goodbye 413 13
- Now Scotland has voted "No", when does England get to vote? 819 36
- Tax on private fuel for own car 191 5
- Is it possible to retrospectively change the tax year that dividends were paid. 351 16
- Sportman claiming for training kit 991 11
- Flat rate scheme 169 3
- Drop box Storage 193 3
- Private portion of costs and expenses in Accounts 273 13
- Any Scottish members out there? 11,188 413
- Has HMRC got powers to do this? 618 4
- Furnished lettings criteria 128 1
- Is there an expert in Excel out there? 415 5
- SAGE TRANSACTIONS DATA 133 2
- Pension Contributions Relief 364 11
- Recovering VAT on property purchase 117 1
- Tax on interest received from insurance company 204 2
- Unnecessary S9A Enquiries 306 1
- Naming new company 208 4
- Raiders of the Lost Tax File 1,270
- Chartered Accountant in County Down N.Ireland 453
- National Insurance 352
- Non Resident 266
- Cass 5 FCA Client Money Software recomendation 259
- Franchise income and costs 238
- Hands on experience of Digita 196
- Employer's Helpline 144
- Best way to take money from a business if you have unlimited EIS allowances? 139
- employment capital allowances 136